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.
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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