Partially enhanced ABCP outstandings grew 4.3% from the 3Q04 to $601 billion at the end of 2004, consistent with amounts recorded at year-end in 2002 and 2003, according to a new report from Standard & Poor's. This figure has remained constant for the past three years, after growing an average 36% annually during the preceding 10 years.

From December 2002 to December 2004, combined issuance out of multiseller and loan-backed conduits declined by roughly $52.7 billion, the report found. However, this decline was offset by a $51.7 billion increase in issuance out of single-seller and arbitrage conduits during this timeframe. "Conduits that were newly rated in 2004 contributed to a significant portion of the growth of partially enhanced ABCP issuance out of single-seller and arbitrage conduits," an S&P analyst noted.

As of Dec. 31, 2004, new conduits accounted for 47% of the $22.6 billion increase in issuance out of arbitrage conduits year-over-year. Similarly, new single-seller conduits represented 66% of the $9.7 billion increase in issuance for that segment of the market.

Securities were the only asset type backing partially enhanced ABCP conduits that experienced significant growth in 2004, at 33% of all assets as of Dec. 31, 2004, up from 26% at year-end 2003. Credit cards saw the largest decline, falling to 7% from 10% of total assets backing ABCP. Mortgages now comprise 15% of all assets backing ABCP, up from 10% in 2001.

Copyright 2005 Thomson Media Inc. All Rights Reserved.

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