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.


  • May payments slump

    Forbearances are down for the first time since CARES, but payments by borrowers in forbearance slump

    Last week saw the first net fall in US mortgage forbearances since the beginning of the Covid 19 cri...

    News    5 June 2020
  • Risk transfer round-up - 5 June

    CRT sector developments and deal news

    Sabadell is rumoured to be readying an SME significant risk transfer deal for the second half of the...

    News    5 June 2020
  • Repricing of risk?

    Funded, unfunded investor collaboration to rise

    The outlook for the significant risk transfer market appears to be positive, at least in the short t...

    News Analysis    5 June 2020
  • Collection hitch

    Italian NPL ABS suffer Covid setback

    The Covid-19 pandemic has severely hit Italian non-performing loan securitisations. Since April, the...

    News    5 June 2020
  • Capital trouble

    GSEs stare down the barrel of reduced capital relief for CRT deals

    The re-proposed capital rules for the GSEs before they exit conservatorship, released by the Federal...

    News Analysis    5 June 2020
  • Conduit CMBS on watch

    Sector developments and company hires

    Conduit CMBS on watch S&P has placed its ratings of 96 classes from 30 US conduit CMBS on...

    Market moves    4 June 2020
  • More Euro CLOs on review

    Sector developments and company hires

    More Euro CLOs on review Moody’s has put a further 234 tranches from 77 European BSL CL...

    Market moves    3 June 2020
  • NPL ABS prepped

    Pancretan Bank readies Castor

    Pancretan Bank is readying a non-performing loan ABS that references an approximately €1.1b...

    News    3 June 2020
  • New paradigm?

    Trustee discretion required in virtual environment

    The coronavirus crisis ushered in a new paradigm for securitisation noteholder communication and doc...

    News Analysis    2 June 2020
  • Equity opportunities?

    Sector developments and company hires

    Equity opportunities? Despite a lack of visibility and liquidity and with cashflows likely to deter...

    Market moves    1 June 2020
  • SCI Start the Week - 1 June

    A review of securitisation activity over the past seven days

    Last week's stories Accessing guarantees CBILS securitisation warehouses mulled Forbe...

    News    1 June 2020
  • Renewables JV inked

    Sector developments and company hires

    Renewables JV inked By way of a joint venture, illimity Bank and VEI Green II have set up a securit...

    Market moves    29 May 2020
  • Galaxy returns

    Alpha relaunches NPL ABS

    Alpha Bank is relaunching its project Galaxy non-performing loan ABS following the coronavirus disru...

    News    29 May 2020
  • Accessing guarantees

    CBILS securitisation warehouses mulled

    Securitisation is gaining traction as a way for a wider investor base to access coronavirus-induced...

    News Analysis    29 May 2020
  • Risk transfer round-up - 29 May

    CRT sector developments and deal news

    ABN AMRO is rumoured to be readying a corporate capital relief trade that is expected to close in 3Q...

    News    29 May 2020
  • Pan-European guarantee fund launched

    Sector developments and company hires

    Pan-European guarantee fund launched The EIB board has approved a €25bn Pan-European Guara...

    Market moves    27 May 2020
  • Marketplace merit

    Online lending resilient amid impairments

    The performance of online lending platforms remains resilient, despite coronavirus-related pressures...

    News    27 May 2020
  • Lift off

    Francesco Di Costanzo, head of structured credit at Hoist Finance, answers SCI's questions

    Q: How and when did you become involved with securitisation? A: We are a licensed credit market in...

    The Structured Credit Interview    27 May 2020
  • Persistent opportunity

    Tor Trivers, md and head of the structured credit group at CDIB Capital, answers SCI's questions

    Q: How and when did CDIB Capital become involved in the structured credit market? A: CDIB Capital w...

    The Structured Credit Interview    27 May 2020
  • Limited effect?

    Performance trigger suspensions eyed

    The Italian government last week passed the Decreto Rilancio, a decree that aims to restart the econ...

    News    22 May 2020
  • CLO tender offer launched

    Sector developments and company hires

    CLO tender offer The Black Diamond CLO 2015-1 issuer has launched a tender offer to all noteholders...

    Market moves    22 May 2020