Over the past several weeks, ABCP industry sources are reporting a slowdown in origination volume in response to potential accounting hurdles and consolidation issues currently being discussed by the Financial Accounting Standards Board.
The revision of FASB 94 is expected to be released for commentary sometime in April. The new consolidation proposals could strip some of the economic incentives found in ABCP and other securitization vehicles, specifically CDOs, as neither are structured through qualifying-SPEs. For ABCP, it could require individual sellers to consolidate the assets back onto their balance sheets. For securities arbitrage conduits, the administrator could be made to consolidate.