ABCP looms large among the victims of Moody's bank downgrades on June 21. Some of these banks support ABCP conduits, which, in turn, saw their ratings drop. And in ABCP land, that single grade difference can make or break a conduit. It's because money market funds - ABCP's biggest investors - can only buy 'P-1' paper.

This comes on top of another huge disincentive for money mutual funds to buy ABCP, as Nora Colomer explains in this month's cover story. These investors are facing regulatory curbs that would reduce their buying power. The situation illustrates once again the rigmaroles caused by tighter regulation of the securitization market and, in this case, related sectors.

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