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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.


  • Diversified play

    Rate improvements driving ILS pick-up

    Reinsurance rate improvements are precipitating new investor interest in and fund reallocations to t...

    News    13 February 2020
  • Risk transfer boost

    CRT issuance breaks record

    Capital relief trade issuance broke a record in 2019, with volumes reaching €7.5bn. This ma...

    News Analysis    13 February 2020
  • CRT upgraded due to 'substantial' increase in CE

    Sector developments and company hires

    Canadian MBS ETF BMO Asset Management has launched a new stable of ETFs trading on the TSX, inclu...

    Market moves    12 February 2020
  • CMBS trustee assumption refuted

    Sector developments and company hires

    EMEA Michael Newell has joined Cadwalader, Wickersham & Taft as a partner in London. A me...

    Market moves    10 February 2020
  • SCI Start the Week - 10 February

    A review of securitisation activity over the past seven days

    SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SCI NPL Securitisa...

    News    10 February 2020
  • Sporadic issuance

    CQS SRT wave unlikely

    BNP Paribas arranged Amalia, Banca Nazionale del Lavoro’s landmark synthetic securitisatio...

    News Analysis    10 February 2020
  • EBA reports pending

    Trapped excess spread requirement could be dropped

    The EBA will finalise its approach to significant risk transfer this year through the publication of...

    News Analysis    7 February 2020
  • Risk transfer round-up - 7 February

    CRT sector developments and deal news

    Bank of Scotland (BOS) is in the market with Syon Securities 2020, its second UK mortgage SRT (SCI 2...

    News    7 February 2020
  • Syon Securities priced

    Bank of Scotland engineers return

    Bank of Scotland has priced a seven-year financial guarantee that references a £550m portf...

    News    7 February 2020
  • Tightening trend

    European ABS market update

    Appetite for European ABS paper continues to be strong. The market is currently characterised by a d...

    Market Reports    7 February 2020
  • GSE Libor transition deadlines released

    Sector developments and company hires

    ECOWAS prepping ABS The Commission of the of the Economic Community of West African States (ECOWAS)...

    Market moves    6 February 2020
  • Rating agency shuffles senior US staff

    Sector developments and company hires

    EMEA Pan-European special situations and credit trading lawyer Justin Conway has joined McCarthy De...

    Market moves    5 February 2020
  • Advisor picked to help end GSE conservatorship

    Sector developments and company hires

    Acquisition Link Group has signed an agreement to acquire Pepper European Servicing from Pepper G...

    Market moves    4 February 2020
  • HAPS flurry

    Greek NPL ABS pipeline grows

    Piraeus Bank is set to securitise €7bn of non-performing loans in 2020. The lender is the l...

    News    4 February 2020
  • Hong Kong landmark

    First-of-a-kind deal could herald broader securitisation market return

    A landmark ABS deal in Hong Kong is anticipated to be the first of many. At the same time, there is...

    News Analysis    4 February 2020
  • Crestline Denali CLO interests acquired

    Sector developments and company hires

    Additional CLOs for Ares An Ares Management Corporation subsidiary is set to acquire a managing int...

    Market moves    3 February 2020
  • SCI Start the Week - 3 February

    A review of securitisation activity over the past seven days

    Transaction of the week Goldman Sachs has completed an unusual catastrophe bond that covers the tai...

    News    3 February 2020
  • Grasshopper up

    Landmark green SRT finalised

    RBS has completed a landmark capital relief trade referencing a £1.1bn portfolio of UK pro...

    News Analysis    31 January 2020
  • Covered funds provisions set to be revised

    Sector developments and company hires

    AMR auction debut The first-ever CLO applicable margin reset executed online – via KopenT...

    Market moves    31 January 2020
  • Ramping up

    BlueBay bolsters structured credit footprint

    BlueBay Asset Management is ramping up its debut CLO, with launch planned for next quarter. At the s...

    News    31 January 2020
  • Equity increase

    Aircraft ABS volumes powering rise in growth of equity notes

    Aircraft ABS issuance volumes are expected to rise again this year, even after a bumper 2019. As a r...

    News Analysis    31 January 2020