OREANDA-NEWS. Demand for ABCP remains robust heading into next year with a much talked-about broader market development serving as a potential catalyst for more issuance, according to Fitch Ratings in its 2016 outlook report for the sector.

U.S. ABCP outstandings stood at $226 billion through early December, slightly below year-end 2014 levels and 81% below the $1.2 trillion peak seen in July 2007. Fitch has a Stable Outlook for global ABCP in 2016.

'ABCP conduit sponsors were active in 2015 and the year over year decline was much less pronounced than the last several years,' said Senior Director Kevin Corrigan. While significant growth is unlikely for the global ABCP market in 2016, 'a rising longer term interest rate environment could encourage increased utilization of the short term product', said Corrigan.

In Europe, the outlook for major European banks is stable. Despite regulatory hurdles, sponsors are expected to maintain ABCP programs as an alternative funding source for clients. 'European sponsor banks also appear committed to their ABCP programs and they continue to fund traditional asset types within the vehicles,' said Director Lauren Tierney.