Although not much activity is brewing in the ABCP market, Calyon managed to identify enough investor interest in the U.S. to support a newly created subsidiary of LMA, called LMA Americas. The new subsidiary will be able to issue dollar-denominated commercial paper.

"There were enough dollar-denominated assets in LMA, so it made sense," to create an entirely new subsidiary, said a source familiar with the situation.

Created in 1998, LMA is a fully supported, multiseller vehicle that provides financing for trade receivables, credit cards, student loans and auto loans. LMA's support facility mainly comes from Calyon, while 5% of its support facility is provided by several other top-rated banks, including Rabobank and Natixis. Such traditional programs are among the less exotic structured finance instruments that have not been negatively affected by the volatility in the U.S. housing market.

Tellingly, other types of ABCP programs continue to struggle to issue new ABCP and have shut down. Keybank's Public Square Funding, Series II, and Eurohypo's Times Square Funding, repaid all outstanding paper in full and stopped all new issuance, according to information from Moody's Investors Service. Recent program closures also included Freedom Park Capital, administered by Promontory Asset Finance Co. Although Freedom Park Capital was a fully supported, multiseller program, it suffered from a lack of investor interest, due to its extendible note feature, said market sources. Promontory recently closed its Stamford, Conn., office and consolidated its operations in its New York office, according to market sources. The company declined to comment.

Although multiseller ABCP programs are among the several conduits that have recently shut down, ABCP market sources point out that that group of conduits is still stable.

At press time, market sources estimated that the original LMA program had about 12 billion ($17.8 billion) in outstanding short-term debt issues in the form of French domestic CP, called Billets de Tresorerie (BTs) and Euro CP. About 90% of those assets were denominated in Euros and the rest was split evenly between U.S. dollar and British pound assets.

"The expectation is to continue growing the trade receivables business," said a source familiar with the bank. The newly created subsidiary had $500 million outstanding at press time, and market sources said they expect that amount to increase to $1 billion by the end of the first quarter.

Calyon also sponsors Atlantic Asset Securitization and Lafayette Asset Securitization, which have about $13 billion in outstanding ABCP combined, say market sources.

(c) 2008 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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