...Collateralized CP Declines: The number of collateralized commercial paper (CCP) programs and total CCP outstanding peaked in February 2014. Since then, CCP outstanding has fallen by 43%, despite the seeming attractiveness of the product for banks looking to diversify funding, and money market funds attracted new sources of investment supply. Collateralized Structure: CCP structures provide investors a secured investment alternative to traditional CP or other unsecured funding instruments. In the CCP structure, financing facilities are collateralized through a special-purpose vehicle (SPV). Debt is issued to investors in the form of CCP with terms that range from 1 to 397 days. Chart 2 on page 2 shows an example of a CCP structure. Guaranteed CP: The CCP is typically either guaranteed by a bank and carries the bank's short- term rating or is issued by a rated subsidiary of the bank and carries the subsidiary's short-term rating. The SPV enters into repurchase agreements (repos) with the...
