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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.


  • SRT boost

    BMO launches capital relief trade

    Bank of Montreal (BMO) has completed a five-year financial guarantee that references US and Canadian...

    News    29 July 2020
  • ILS issuance remains resilient

    Sector developments and company hires

    ILS issuance remains resilient US$2.8bn of property catastrophe bond limit was placed in 2Q20, brin...

    Market moves    28 July 2020
  • CLO equity defies predictions

    Sector developments and company hires

    CLO equity defies predictions US CLO equity cashflow performance is defying pessimistic predictio...

    Market moves    27 July 2020
  • 'Switch' success

    Aussie non-bank issuance on the rise

    The Australian securitisation market has seen a rise in non-bank issuance post-coronavirus. Such act...

    News Analysis    27 July 2020
  • SCI Start the Week - 27 July

    A review of securitisation activity over the past seven days

    Last week's stories Carrots and sticks 'Wide-ranging and ambitious' recommendations welcomed ...

    News    27 July 2020
  • 'Quick fix' for NPE, synthetic securitisation

    Sector developments and company hires

    ‘Quick fix’ for NPE, synthetic securitisation The European Commission has adopt...

    Market moves    24 July 2020
  • Funding diversity

    Non-bank lending 'credit neutral' for SME ABS

    Moody’s suggests that the emergence of non-bank lenders – such as Paypal, Amazon...

    News    24 July 2020
  • Issuance boost

    Full-stack SRTs unlocked

    BBVA and Santander have reopened the full-stack significant risk transfer market with the issuance o...

    News Analysis    24 July 2020
  • Qualitative approach?

    Covid complicating CRT analytical processes

    The Covid-19 fallout has complicated further the analytical process in connection with capital relie...

    News Analysis    24 July 2020
  • Italian trades inked

    Unicredit completes NPL pair

    Unicredit has sold two predominantly unsecured SME non-performing loan portfolios for a total of &am...

    News    23 July 2020
  • ReoCo restructuring in the works

    Sector developments and company hires

    ReoCo restructuring in the works The Leviticus SPV issuer is set to implement a ReoCo structure, ha...

    Market moves    23 July 2020
  • Canadian CMBS forbearance highlighted

    Sector developments and company hires

    Canadian CMBS forbearance highlighted As of the June 2020 remittance reports for the Canadian condu...

    Market moves    22 July 2020
  • Positive pick-up

    European ABS market update

    The positive tone across the European securitisation market appears to be continuing this week, foll...

    Market Reports    21 July 2020
  • Carrots and sticks

    'Wide-ranging and ambitious' recommendations welcomed

    The recommendations put forward by the High Level Forum on Capital Markets Union (CMU) last month ha...

    News Analysis    21 July 2020
  • UK Mortgages offer disclosed

    Sector developments and company hires

    UK Mortgages offer disclosed M&G Investment Management (MAGIM), on behalf of one of its m...

    Market moves    20 July 2020
  • SCI Start the Week - 20 July

    A review of securitisation activity over the past seven days

    FREE - CRT modelling panel The next in SCI's series of capital relief trades virtual debates is bei...

    News    20 July 2020
  • Euro CLO par burn rises

    Sector developments and company hires

    Euro CLO par burn rises After a relatively stable Q1, European CLO managers burnt an average -19bp...

    Market moves    16 July 2020
  • Pandemic protections?

    Structural features mitigate auto ABS risks

    Structural features are overall mitigating Covid-19-related risks in auto ABS transactions, thanks t...

    News    16 July 2020
  • Seeking clarity

    Call to reassess repo language

    The AG MIT CMO versus Royal Bank of Canada case, which recently settled (SCI 3 June), highl...

    News    16 July 2020
  • Conflict-free trading

    Benjamin Arnold, founding partner and ceo of Meraki Global Advisors, answers SCI's questions

    Q: How and when did Meraki Global Advisors become involved in the securitisation market? A: Meraki...

    The Structured Credit Interview    16 July 2020
  • Risk transfer round up - 15 July

    CRT sector developments and deal news

    Credit Agricole is rumoured to be readying a corporate capital relief trade that is expected to clos...

    News    15 July 2020