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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.


  • Game changer?

    FDIC rule change to boost bank securitisation

    In what is seen as a fillip to bank issuers of securitised paper, the FDIC has relaxed its so-called...

    News    4 March 2020
  • IRPH index ruling 'credit negative'

    Sector developments and company hires

    CMBS property sales KBRA has been notified of the sale of 29 properties in the Eos (ELoC No. 35) CM...

    Market moves    3 March 2020
  • Performance issues

    Italian NPL ABS business plans scrutinised

    A recent analysis of 19 Italian non-performing loan securitisations reveals that 15 of these transac...

    News    3 March 2020
  • Green light

    OCC gives regulatory approval to JPM CRT

    JP Morgan Chase has won favourable regulatory treatment from the Office of the Comptroller of the Cu...

    News Analysis    3 March 2020
  • Pandemic cat bonds triggered

    World Bank ILS could encourage further issuance

    The current Coronavirus (COVID-19) outbreak will likely trigger pay-outs for US$132.5m in pandemic c...

    News Analysis    3 March 2020
  • DLT litigation ABS on the cards

    Sector developments and company hires

    Acquisition Pretium Partners has acquired the investment management business of Latigo Partners....

    Market moves    2 March 2020
  • Provisioning hedge

    Landmark Italian SRT inked

    AmTrust International has completed its inaugural capital relief trade, which references a &euro...

    News    2 March 2020
  • NPL recognition delayed

    Chinese SMEs supported amid Coronavirus outbreak

    Chinese regulators are allowing the country’s banks to delay the recognition of non-perfor...

    News    2 March 2020
  • SCI Start the Week - 2 March

    A review of securitisation activity over the past seven days

    New MRT report SCI has published a new Special Report on the US Mortgage Risk Transfer sector &...

    News    2 March 2020
  • Risk transfer round-up - 28 February

    CRT sector developments and deal news

    Banca Monte dei Paschi di Siena is rumoured to be readying an SME SRT for next month, with the count...

    News    28 February 2020
  • Diversification offered

    European ABS market update

    The European ABS pipeline is swelling in the run-up to March. Newly announced deals are providing so...

    Market Reports    28 February 2020
  • Brexit question

    UK and EU STS regimes could diverge

    The end of the Brexit transition period on 31 December 2020 will call into question the STS status o...

    News Analysis    28 February 2020
  • MSR subservicing transfer agreed

    Sector developments and company hires

    EMEA Michael Fiebig has been appointed coo at responsAbility Investments. Fiebig will be responsi...

    Market moves    27 February 2020
  • Green ILS framework rolled out

    Sector developments and company hires

    EMEA Nick Holman has joined Kartesia to lead investments in the UK from the Kartesia Senior Oppor...

    Market moves    26 February 2020
  • Project Cairo prepped

    Eurobank applies for HAPS guarantee

    Eurobank has applied to the Greek government for a senior tranche guarantee under the Hercules Asset...

    News    26 February 2020
  • GM withdrawal from Aussie autos 'credit negative'

    Sector developments and company hires

    CMBS analytics platform Thetica Systems has launched a web platform for CMBS pricing and analytic...

    Market moves    25 February 2020
  • UK SRT debuts

    Opel prepping full-stack auto ABS

    BNP Paribas is marketing Opel’s second full-stack auto ABS from the E-CARAT programme. Dub...

    News    25 February 2020
  • Social factors

    Positive ESG scores for post-crisis vintages

    ESG relevance scores (ESG.RS) are more likely to be negative for seasoned securitisations, according...

    News    24 February 2020
  • High-profile bankers exit SRT

    Sector developments and company hires

    SRT departures Last week saw a couple of high-profile exits from SRT banking teams in London. Struc...

    Market moves    24 February 2020
  • Rare CMBS prepped

    BofA brings 'one-off' Dutch transaction

    BofA is in the market with a Dutch CMBS, dubbed Taurus 2020-1 NL. The €620.6m deal is the f...

    News    24 February 2020
  • SCI Start the Week - 24 February

    A review of securitisation activity over the past seven days

    REMINDER: SCI NPL Securitisation Awards 2020 Nominations are now open for the inaugural SCI N...

    News    24 February 2020