Fitch Ratings said last week that the European ABCP market is bottoming out. Recent figures suggest that the worst of the ABCP market contraction is over.

There are even signs that some multiseller programs are continuing to originate new transactions. This indicates that a recovery is slowly taking shape, the rating agency said.

However, while European investors are currently re-approving the conduits they can buy, few have dedicated ABCP analysts in place to help accelerate this tedious process.

The situation is further aggravated by the wider deleveraging that is happening throughout the financial system, which is generally hindering investor demand, Fitch said. Consequently, while commercial paper outstandings are beginning to stabilize, the market is not expected to recover in the short to medium term.

(c) 2008 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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