The reaction to JPMorgan, Bank of America and Citi’s proposals to launch a super-SIV called M-LEC to solve the liquidity crisis in the ABCP sector has been an equal mix of enthusiasm and cynicism.
SIVs have been attempting to hold off having to sell assets in various ways, such as using repo instead of CP funding and vertical slice sales (the latter involve the SIV sponsor redeeming capital notes in exchange for the capital note holder buying a chunk of SIV assets).
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