Funding agreement-backed note issuance levels reached a record $11.8 billion in the first quarter of 2005 according to a Standard & Poor's Ratings Services' research report. The numbers reflected a 70% increase from volume reported in 4Q04 and an 11% raise compared with the same quarter the previous year, SunAmerica Life Insurance Co. was the largest issuer of funding agreement-backed notes year-to-date with $2.3 billion of issuance. Allstate Life Insurance Co. followed in second place with $1.1 billion and General Electric Capital Assurance Co. came in third with $300 million in total volume generated, the report added.

These types of investments - issued by a SPV reliant on a funding agreement to make scheduled payments - were less popular with U.S. investors back in the late 90's, said Gary Martucci, an analyst at S&P and co-author of the report.

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