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.


  • Close relationship

    CRT documentation should evidence intentions

    When structuring a capital relief trade, the documentation should evidence the intentions of the par...

    News    20 March 2020
  • Further central bank support unveiled

    Sector developments and company hires

    Bridging loan deal inked UK challenger lender Glenhawk has closed a private revolving securitisatio...

    Market moves    19 March 2020
  • Short-term volatility

    SRTs on hold, although 2H20 rebound expected

    Capital relief trade issuance has been postponed until the second half of the year due to the corona...

    News Analysis    19 March 2020
  • Risk off

    Securitisation markets seize up

    Amid a global sell-off, securitised asset classes where liquidity is scarce and asymmetry of positio...

    News    19 March 2020
  • EIB mulls SME ABS purchase plan

    Sector developments and company hires

    Dealer credit facility launched The US Fed has established a Primary Dealer Credit Facility (PDCF)...

    Market moves    18 March 2020
  • Pandemic response

    DNB lowers bank buffers amid outbreak

    Dutch central bank DNB has lowered the capital buffers for Dutch banks and postponed the introductio...

    News    18 March 2020
  • Even playing field?

    Reg AB relaxation set to release RMBS

    The relaxation of FDIC rules regarding bank compliance with SEC Regulation AB when issuing RMBS (SCI...

    News Analysis    18 March 2020
  • Fed rolls out CPFF

    Sector developments and company hires

    CMB purchase programme The Bank of Canada has announced that it stands ready, as a proactive measur...

    Market moves    17 March 2020
  • Liquidity concerns

    European ABS pipeline coming to a halt

    The European ABS primary market is grinding to a halt amid coronavirus-related volatility, with many...

    News Analysis    17 March 2020
  • Greencoat liquidator appointed

    Sector developments and company hires

    EMEA Ocorian has appointed Abigail Holladay as director of transaction management. Based in Londo...

    Market moves    16 March 2020
  • SCI Start the Week - 16 March

    A review of securitisation activity over the past seven days

    SCI NPL Securitisation Awards 2020 As a result of COVID-19, the SCI NPL Securitisation semina...

    News    16 March 2020
  • Native blockchain securitisation debuts

    Sector developments and company hires

    Ares facility inked Non-Standard Finance (NSF) has entered into a new six-year securitisation fac...

    Market moves    13 March 2020
  • AMC uncertainty

    Trade deal clouded by uncertainties for NPLs

    The US-China trade deal now finally allows foreign investors to acquire coveted local AMC licences t...

    News    13 March 2020
  • Multi-tranching?

    Investor diversification raises triple-tranche prospects

    Seer Capital sees a future for triple tranche structures in significant risk transfer transactions....

    News Analysis    13 March 2020
  • Definition debate

    Call for coalescence around ESG standards

    Impact is still being defined in the capital markets, both at a conceptual level and in terms of gen...

    News Analysis    12 March 2020
  • Regulatory events

    Standard Chartered amends Gongga SRT terms

    Standard Chartered has amended the regulatory event definitions for the class A notes of a corporate...

    News    12 March 2020
  • Mortgage moratoriums

    Impact of payment suspensions to be limited

    The Italian government and a trio each (at the time of writing) of lenders in Ireland and the UK are...

    News    12 March 2020
  • AXA IM creates two key units

    Sector developments and company hires

    AXA IM restructuring AXA Investment Managers intends to create a new €137bn business unit...

    Market moves    11 March 2020
  • Dutch VAT grace period mulled

    Sector developments and company hires

    Alhambra missed payment A borrower of a €10m loan securitised in the Alhambra SME Funding...

    Market moves    10 March 2020
  • Insurance giants set to combine

    Sector developments and company hires

    Insurer combination agreed Aon and Willis Towers Watson have agreed to combine in an all-stock...

    Market moves    9 March 2020
  • SCI Start the Week - 9 March

    A review of securitisation activity over the past seven days

    Transaction of the week AmTrust International has completed its inaugural capital relief trade, whi...

    News    9 March 2020