No longer content to watch from the sidelines, big players have officially moved into the CDPC space -and some expect they'll come to dominate it, bringing a wave of liquidity with them. Marking the first entrance of a prominent structured credit market participant, Massachusetts Mutual Life Insurance Co., parent of asset manager Babson Capital Management, officially launched its CDPC Invicta Credit LLC. last week. Deutsche Bank and AXA Investment Managers are waiting for a rating for their CDPC, NewLands Financial, and Bear Stearns and AIG Investment Management are also rumored to be hanging in the wings.

The entrance of established structured finance players to the CDPC market brings to the Street a broader array of highly rated counterparties. The resulting ability to diversify counterparty risk is expected to bring an increasing amount of liquidity to the top of the capital structure, market participants said. "One of the things it would do is continue to contribute to better and better liquidity for senior tranches of ABS transactions," said Nik Khakee, a director at Standard & Poor's. And while it is more difficult to achieve a triple-A counterparty rating for ABS transactions, Invicta, which is currently able to operate in the corporate arena, is on that path.

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