JPMorganChase announced last week its intention to wind down its $4.3 billion dollar Delaware Funding ABCP conduit. The firm will transfer the assets from Delaware Funding to its Park Avenue Funding, or Parko, conduit, according to Deborah Toennies, managing director at JPMorgan. Delaware Funding's outstanding obligations are expected to be fully paid down by the end of May.
The firm has five other ABCP conduits, and Toennies said the closing of the Delaware Funding conduit does not represent a scaling back of JPMorgan's activities in the sector. "This decision will enable JPMorgan to create a platform of conduits with a greater differentiation of strategies and to provide for more efficient funding of larger transactions," said the firm in a statement. "The asset-backed conduit market is a key focus for growth within the investment bank. As we endeavor to maintain efficient funding and provide value to investors and clients, it makes sense to close DFC at this time," said Kirk Farney, head of asset-backed conduits, as part of the statement. Toennies also said shutting down the DFC conduit would save legal costs for sellers.