1/3 of ABCP Market Disappears

The purge of the Asset Backed Commercial Paper (ABCP) market continues as a further $23 billion of Commercial Paper outstanding disappeared in the week ending December 5th. Since the peak in early August the value of Commercial Paper outstanding has declined by $393 billion or 1/3 of the total.

There is no end in sight to the ABCP market decline as credit market conditions fail to improve. That's despite interest rate cuts by the Bank of England and Canada in the last few days and the promise of more from the Fed. A flight to quality paper ensures that investors will continue to give ABCP a wide berth.