The $1 trillion ABCP market shows no signs of slowing down, with its low cost of financing and short-term flexibility. Still, professionals in the sector wonder if the surging repurchase agreement market, also known as repos, might one day take a significant bite out of commercial paper business.

For the past couple of years, dealers used commercial paper to fund the super senior tranches of certain asset-backed deals. More recently, however, repos appear to be taking the place of asset-backed commercial paper to fund those securities and CDOs, market sources said.

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