Perhaps associated with the June 30 deadline to restructure under FIN 46, the asset-backed commercial paper market has shown two consecutive weeks of declining volume, ending last Wednesday below the $720 billion mark, after pushing over the $740 billion mark in mid-June. As interest rates fell again last week, commercial paper discount rates have hit one-year lows at several maturities (see p. 33), according to the Federal Reserve.

Meanwhile, the rating agencies were reporting a flurry of restructuring activity last week, mostly variations on the expected loss tranche approach to mitigate consolidation onto the sponsor's balance sheet.

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