Mizuho Corporate Bank, a Tokyo-based commercial bank, has granted its asset-backed commercial paper conduit, Allstar Funding Corp., the ability to fund asset purchases by overdrawing on asset-backed, limited-recourse loans through a bank overdraft agreement.

This is an unusual feature for Japanese banks, and is a crucial one for Allstar and, ultimately, for Mizuho Corporate Bank. It gives the bank more lending flexibility for its clients. Even if future market circumstances thwart Allstar's ability to issue more ABCP, the conduit can raise funds using the Bank Overdraft Agreement, according to Moody's Investors Service, which affirmed the conduit's Prime-1 rating.

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