Jurisdiction(s):
United Kingdom

Key definition

Asset-backed commercial paper definition

What does Asset-backed commercial paper mean? Asset-backed commercial paper (ABCP) is short-term debt issued by a bankruptcy-remote special purpose vehicle (spv) (a conduit) to fund the purchase of receivables or other financial assets, with repayment supported by cashflows from those assets and by liquidity and credit enhancement arrangements, typically provided by a sponsoring bank. In practice, an originator transfers a pool (or multiple pools) of assets to the SPV and the SPV funds itself by issuing commercial paper into the money markets on a rolling basis, usually with maturities of up to 364 days. ABCP is a market term used across securitisation practice and...

ABCP Conduits and SIVs: Structures, SPVs, Credit Enhancement, Liquidity Support and Legal/Regulatory Issues under the UK Securitisation Regime (STS), including Green ABCP

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Practice notes

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What does this Practice Note cover?

This Practice Note explains the principal features of Asset-backed commercial paper (ABCP), conduits and structured investment vehicles (SIVs). It also summarises the key legal and regulatory issues that shape their construction and application.

What is asset-backed commercial paper?

Commercial paper (CP) is a Short-term debt instrument commonly issued by corporates or financial institutions to address near-term funding needs. It is typically unsecured and offered by issuers with strong credit ratings. For more detail on commercial paper, see Practice Note: Commercial paper and euro-commercial paper.

ABCP is a type of CP that is secured against pools of assets, most often receivables delivering predictable cashflows. The issuer of ABCP does not itself require a high credit rating; investors assess the calibre and expected cash flow of the underlying collateral rather than the issuer’s credit profile. A wide range of assets may back ABCP, such as:

credit card receivables
residential and commercial mortgages
commercial loans (eg auto loans and leases)
trade receivables

As with CP, ABCP is generally brought to market under a programme structure, enabling ongoing issuance and rollover...

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Web page updated on 21/05/2026

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