asset backed commercial paper


ABCP. Short-term investment that encompasses the use of a special purpose vehicle or conduit, which serves as the issuing party of commercial paper. The commercial paper is backed by physical assets such as homes, automobiles, or other forms of physical property. Similar to a Term Securities Lending Facility, ABCP's main purpose is to increase liquidity in financial markets. Asset backed commercial paper is similar to collateralized debt obligation (CDO) and is repackaged and sold to investors by banks or other financial institutions.
For example, company A may sell some of its receivables to a financing institution and then the financing institution will repackage it and sell it to investors as ABCP.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
asset allocation fund asset backed credit default swap (ABCDS)