NEW YORK--(BUSINESS WIRE)--Link to Fitch Ratings' Report: Commercial Paper Spotlight
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=742335
U.S. money market fund (MMF) investments in commercial paper (CP) have declined at a moderate but steady rate over the past year, driven by declines in asset-backed commercial paper (ABCP) and nonbank CP, according to a Fitch Ratings report.
As of end-Feb. 2014, the combined share of CP holdings among the top-10 U.S. MMFs was 20.2%, a decline from 23.9% in Feb 2013. On a dollar basis during the same period, CP holdings were approximately $137 billion compared with $160 billion a year earlier, a 14% decline.
This shift has been partly driven by a reduction in ABCP investments. Relative to the year-earlier period, outstanding amounts of ABCP as of end-February 2014 were 22% lower.
Fitch believes regulatory uncertainty surrounding bank sponsors' future liquidity support for ABCP programs appears to be contributing to the continuing shrinkage of that market. The Basel III liquidity coverage ratio (LCR), which banks must meet by 2019, is leading some sponsors of traditional multi-seller ABCP programs to re-assess the impact of liquidity support for these vehicles.
For more information and figures, the full report 'Commercial Paper Spotlight' is available at 'www.fitchratings.com.'
Additional information is available at 'www.fitchratings.com'.
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