The key parties to an ABCP program are:

  • Originator-seller – An entity that originates financial assets and sells those assets directly or through a majority-owned affiliate to an SPV in a true sale and generally acts as the servicer of the financed assets;
  • Sponsor – The party that arranges and structures the SPV, refers assets and borrowers to the program, and provides a liquidity line of credit for each transaction – often the parent entity or an affiliate of the originator-seller;
Outstandings of Moody’s-Rated US ABCP Conduits by Sponsor Type
As of 30 Sept 2012 No. of Sponsors No. of Conduits Outstandings %
Banks 23 37 161,784 68%
Nonbanks 11 17 77,522 32%
Total 34 54 239,305 100%
Source: Moody’s
  • Special-purpose vehicle (SPV) – The bankruptcy-remote third-party securitization vehicle that is set up by its sponsor solely to purchase financial assets from their originator-sellers, to hold and protect the pooled assets from the originator bankruptcy, and to finance the purchase of the assets by issuing and selling the ABCP;
  • Servicer – The party, typically the asset originator-seller or a related firm, who is responsible for collecting payments on the pooled assets and remitting them to the SPV;
  • Administrative agent – The party, often the program sponsor, that conducts the administrative operations of an ABCP program, including monitoring receivables, the issuance and repayment of the CP, compiling reports, ensuring issuer compliance with the program documents and the credit and investment policy, communicating with the issuing and paying agent (IPA), and drawing under the credit and/or liquidity enhancement if needed;
  • Credit rating agency – The party that analyses the program and rates the transaction by assessing the seller-originator, the quality of the underlying assets, the SPV, the servicer, and the credit enhancements.

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