Asset Backed Commercial Paper Sponsor

Categories: ABCP

ABCP programs are set up and managed by the ABCP sponsor. These sponsors are usually large commercial banks. They run ABCP programs as another type of funding that can be offered to their clients, backed by financial assets owned by those clients. Although it is not legally required, the ABCP sponsor is almost always the provider of the liquidity facility. This means that, since modern liquidity facilities are almost always fully supporting, the risk of default on the assets is effectively taken by the sponsor.

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