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.

• Accessing liquidity

  Christoph Gugelmann, co-founder of Tradeteq, highlights the role technology plays in securitising tr...

  Access to liquidity is becoming more important than ever; many businesses – both large and...

  Talking Point    22 April 2020

• SCI Start the Week - 20 April

  A review of securitisation activity over the past seven days

  Last week's stories Bilateral activity Opportunistic capital redeployment underway Coverage...

  News    20 April 2020

• Interest rate mismatches eyed

  Sector developments and company hires

  Interest rate mismatches eyed Moody’s suggests that loan repricing will increase interest...

  Market moves    17 April 2020

• Coverage cleared

  Debut programmatic ILW trade executed

  Tremor last week executed what is believed to be the first programmatic ILW trade via an online auct...

  News    16 April 2020

• CMBS secured, unsecured sub debt weighed

  Sector developments and company hires

  CMBS secured, unsecured sub debt weighed Senior US CMBS loans with unsecured subordinate debt (s...

  Market moves    16 April 2020

• Discounted opportunities

  Insurers target SRT secondary market

  Insurers are now targeting the capital relief trades secondary market in search of discounted opport...

  News    16 April 2020

• Auto ABS rating withdrawn

  Sector developments and company hires

  Auto ABS rating withdrawn Fitch has withdrawn the expected ratings of Swiss Car ABS 2020-1 (SCI 9 A...

  Market moves    15 April 2020

• Bilateral activity

  Opportunistic capital redeployment underway

  The European ABS market appears poised to diverge between central bank-eligible issuance and opportu...

  News Analysis    15 April 2020

• REMIC tax status clarified

  Sector developments and company hires

  REMIC revenue procedure The US Internal Revenue Service has issued a revenue procedure that permits...

  Market moves    14 April 2020

• Risk transfer reboot

  Large corporate SRTs prepped

  Capital relief trade issuance is set for a comeback in 2Q20 as a handful of banks are readying large...

  News Analysis    14 April 2020

• TALF 2.0 eligibility expanded

  Sector developments and company hires

  TALF 2.0 eligibility expanded The US Fed has expanded the range of assets that are eligible collate...

  Market moves    9 April 2020

• HAPS halt?

  Greek NPE ABS plans disrupted

  The non-performing exposure reduction plans of the four systemic Greek banks are expected to be dela...

  News    9 April 2020

• Modelling delinquency deluge

  Mortgage market advisers and consultants are struggling to find any models that work for the current...

  “Our clients are modelling a range of scenarios but are preparing themselves for the worst...

  News    8 April 2020

• EIF calls for guarantee applications

  Sector developments and company hires

  EIF calls for guarantee applications The European Commission has unlocked €1bn from the Eu...

  Market moves    8 April 2020

• Stochastic modelling

  IFRS 9 challenges persist amid pandemic

  Supervisors have advised banks to embed the effects of government programmes, such as payment morato...

  News Analysis    8 April 2020

• Logistical challenges

  Container ABS disruption weighed

  The marine container industry is facing substantial logistical challenges due to the impact of Covid...

  News    8 April 2020

• CLO stress scenario updated

  Sector developments and company hires

  CLO stress scenario updated Fitch is set to apply an updated stress scenario to all CLO portfolio...

  Market moves    7 April 2020

• Improving sentiment

  European ABS market update

  European ABS secondary market sentiment improved last week, with the return of investor appetite, an...

  Market Reports    7 April 2020

• Negative outlook for asset performance

  Sector developments and company hires

  Negative outlook for asset performance Fitch is updating its rating assumptions for all global st...

  Market moves    6 April 2020

• SCI Start the Week - 6 April

  A review of securitisation activity over the past seven days

  Last week's stories Breathing space? EU banks benefit from Basel 3 delay Capacity con...

  News    6 April 2020

• ESG catalyst?

  Positive impact SRTs gaining traction

  Significant risk transfer is primarily associated with achieving favourable capital treatment. Howev...

  News Analysis    3 April 2020