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ABS

ABS or asset-backed securities are bonds or notes created via securitisation that are backed by a range of assets or receivables. Generically, all securitisations can be labelled ABS and it is often used as a coverall term; in some cases in SCI, ABS will be used in this manner. However, in many cases, ABS are taken to exclude mortgage-backed securities (MBS) and structured credit instruments, such as CDOs. If so, then asset-backed securities or ABS are taken to include consumer ABS, such as credit card securitisations, auto loan or dealer floorplan ABS, student loan securitisations, project finance/infrastructure securitisations and equipment leasing-based transactions. ABS originators are typically loan issuers, such as banks, credit card companies, auto finance and consumer finance firms, but can be any institution that generates regular, quantifiable future income flows (or cashflows), which includes governments. To create asset-backed securities, institutions sell pools of their loans to a special-purpose vehicle, or SPV, which then sells the loans to a trust. The trust then repackages the loans as interest-bearing securities and issues them. This true sale of the loans to the SPV ensures that the ABS is treated as being bankruptcy-remote from the originator.


  • ABSPP plans published

    Sector developments and company hires

    APP reinvestment set The ECB has outlined the technical parameters for the reinvestment of the pri...

    Market moves    14 December 2018
  • JV trend continues

    Landmark NPL transactions agreed

    Banco BPM announced this week a non-performing loan securitisation with Elliott International and Cr...

    News Analysis    14 December 2018
  • STS guidelines published

    Sector developments and company hires

    P2P head hired Dynamic Credit has hired Giles Andrews as chairman of its supervisory board. The bo...

    Market moves    13 December 2018
  • Concerns ignited

    Wildfire peril pricing questioned

    ILS market participants are re-evaluating whether the pricing of wildfire risk in catastrophe bonds...

    News Analysis    13 December 2018
  • Libor consultation launched

    Sector developments and company hires

    ILS Peak Reinsurance Company has launched Asia’s first sidecar transaction via a new Ber...

    Market moves    11 December 2018
  • Risks remain

    Termination risks persist for SF transactions in no-deal scenario

    Contingency plans being implemented by financial institutions will help to avoid many derivatives ri...

    News    10 December 2018
  • Corporate finance partner hired

    Sector developments and company hires

    CDO manager transfer Dock Street Capital Management has replaced Deerfield Capital Management as c...

    Market moves    7 December 2018
  • Bid scarcity

    European ABS market update

    A major UK bank is focusing efforts of European NPLs in the coming weeks, as spreads continue to wid...

    Market Reports    7 December 2018
  • BTL securitisation planned

    Sector developments and company hires

    Europe Accunia has promoted Mads Romild as head of Accunia’s CLO platform. Romild will c...

    Market moves    6 December 2018
  • TRAFIN relaunched

    Deutsche Bank replaces trade finance CRT

    Deutsche Bank has refinanced its TRAFIN 2015-1 deal with the issuance of a new trade finance capital...

    News Analysis    5 December 2018
  • Colonnade issuance continues

    Barclays completes corporate capital relief trade

    Barclays has completed Colonnade Global 2018-2, a US$110m financial guarantee that references a US$1...

    News    5 December 2018
  • Enforcement uncertainty

    Set-back for STS-eligible issuance

    The recent statement issued by the Joint Committee of the ESAs (SCI 4 December) is unlikely to be su...

    News    5 December 2018
  • Activity upsurge

    European ABS market update

    The European primary and secondary ABS markets are seeing a surge in activity, due to uncertainty ov...

    Market Reports    4 December 2018
  • BDC merger announced

    Sector developments and company hires

    BDC merger Golub Capital BDC (GBDC) has merged with Golub Capital Investment Corporation (GCIC), w...

    Market moves    4 December 2018
  • Proportional approach

    ESAs tackle delay in transparency requirements

    The joint European Supervisory Authorities (ESAs) - which consist of the EBA, ESMA and the European...

    News    4 December 2018
  • ESAs suggest 'proportion'

    Sector developments and company hires

    Aussie securitisation fund The Australian government has introduced a A$2bn Australian Business Se...

    Market moves    3 December 2018
  • SCI Start the Week - 3 December

    A review of securitisation activity over the past seven days

    Market commentary European ABS activity remained subdued last week, with spreads drifting wider, du...

    News    3 December 2018
  • NPL plans accelerated

    Company hires and sector developments

    Eurobank merger Eurobank is merging with Grivalia in a bid to accelerate the reduction of non-perf...

    Market moves    30 November 2018
  • Tighter pricing

    Latest Elvetia trade completed

    Credit Suisse has completed a Swiss corporate and SME significant risk transfer trade from its Elvet...

    News    30 November 2018
  • Tough approach

    PRA guidance puts UK CRT issuers at a disadvantage

    The UK PRA’s latest significant risk transfer guidance is putting UK capital relief trade...

    News Analysis    30 November 2018
  • Funding boost for online lender

    Sector developments and company hires

    Alesco CDOs transferred The collateral management agreements for the Alesco Preferred Funding X to...

    Market moves    29 November 2018