The structure of liquidity facilities that are used to cover asset-backed commercial paper issues has been brought to the fore over the past few months as more and more issuers are finding it very difficult to fund their ABCP programmes. Until recently, it had always been assumed that liquidity facilities would not need to be drawn upon, and consequently they were seen as more of a backstop than as a priority component of commercial paper issuance.
But the credit crunch has changed everything. Although issuance has returned in the ABCP market, no one is labouring any more under the...
