edit Single-seller programs involve a conduit that issues commercial paper backed by assets from only one originator, which frequently also sponsors the conduit. CDOs are similar to SIVs in structure, but are not actively managed and tend to rely on explicit but only partial liquidity support. There also were 11 mortgage single-seller programs that primarily warehoused mortgages prior to their securitization. 1,052.4 290.6 233.5.1 522.9 239.0 283.9 238.9.0 Apr.
The sponsor is typically a financial institution that provides the conduit with a committed liquidity line, essay on shall i compare thee administers its daily operations, and sometimes also provides the conduit with credit enhancement through a letter of credit that absorbs credit losses. As negative information about.S. There were 36 abcp CDO programs in July 2007, with abcp outstanding of 47 billion. Although commercial paper is the most prevalent money market instrument, the secondary market is very small, primarily because the terms of commercial paper are very short, and because buyers of commercial paper usually purchase paper with maturities that coincide with their need for money. Benefits edit Originally, banks set up abcp conduits to finance only safe assets off-balance sheet. Several abcp conduits fall victims to liquidity crisis, and so are their sponsor financial institutions. 1.97.02.12.22.214.171.124.22.43 Aug. 126.96.36.199.97.98.09.14.188.8.131.52.36 Note:.a. 7 Structure edit An abcp conduit is set up by a sponsoring financial institution (henceforth, sponsor).
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