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.

• Chinese reference centre upgrade 'credit positive'

  Sector developments and company hires

  Credit system upgraded The People's Bank of China’s Credit Reference Center last...

  Market moves    23 January 2020

• Climate fund launched

  Blended finance structure offers four classes of risk

  ResponsAbility Investments has announced the first closing of an innovative climate fund, set up as...

  News    23 January 2020

• Risk transfer round-up - 23 January

  CRT sector developments and deal news

  Caixabank is rumoured to be prepping a consumer SRT for this year. The lender printed its last trans...

  News    23 January 2020

• Bespoke service

  Emma-Jane Fulcher, founder of Grovewood Capital Consultancy, answers SCI's questions

  Q: How and when did Grovewood Capital Consultancy become involved in the securitisation market? A:...

  Provider Profile    23 January 2020

• Parametric cyber risk trade inked

  Sector developments and company hires

  Acquisition Ares Holdings is set to acquire a controlling interest in Asian alternative asset man...

  Market moves    22 January 2020

• Risk transfer round-up - 22 January

  CRT sector developments and deal news

  BBVA is rumoured to be readying a capital relief trade for 1Q20. The transaction would be the lender...

  News    22 January 2020

• CEE SME guarantee increased

  Sector developments and company hires

  EMEA Alvarez & Marsal has launched a European debt advisory practice with the appointment...

  Market moves    21 January 2020

• DSB wind-down begins

  Dutch bank to exercise first ABS call option and aims for more

  Bankrupt DSB Bank is preparing for the possible sale of its loan portfolio by winding down its secur...

  News    21 January 2020

• SCI Start the Week - 20 January

  A review of securitisation activity over the past seven days

  Stories of the week Consumer boost Santander completes innovative SRTs Under pressure US stu...

  News    20 January 2020

• 'No Data' threshold consultation underway

  Sector developments and company hires

  C-PACE partnership Eyzenberg & Company and Greenworks Lending have formed Eyzenberg Green...

  Market moves    17 January 2020

• FFELP transition legislation mooted

  Sector developments and company hires

  Call for FFELP solution The SFA has joined the Education Finance Council (EFC) in calling for whole...

  Market moves    16 January 2020

• Consumer boost

  Santander completes innovative SRTs

  Santander has completed two synthetic securitisations of consumer loans. The transactions are the ba...

  News    16 January 2020

• Aircraft equity investment disclosed

  Sector developments and company hires

  Aircraft equity investment Floreat has disclosed that it invested US$25m in the equity certificat...

  Market moves    15 January 2020

• Hong Kong ABS recommendations released

  Sector developments and company hires

  Alternative risk transfer Arthur J Gallagher has increased its interest in Capsicum Reinsurance B...

  Market moves    14 January 2020

• Under pressure

  US student loan ABS holding firm so far

  US student loan ABS faces a difficult year from both technical and political pressures. However, the...

  News Analysis    14 January 2020

• SCI Start the Week - 13 January

  A review of securitisation activity over the past seven days

  Transaction of the week Goldman Sachs is marketing River Green Finance 2020, which is expected to b...

  News    13 January 2020

• Landmark quake bond closed

  Sector developments and company hires

  DLT legal analysis published ISDA, Clifford Chance, R3 and the Singapore Academy of Law have publ...

  Market moves    13 January 2020

• Landmark CLN finalised

  Santander completes undrawn RCF trade

  Santander has completed a €147m CLN that is backed entirely by undrawn corporate and financ...

  News    10 January 2020

• Auto debut

  Further credit union issuance anticipated

  More credit unions are expected to tap the US securitisation market, following the closing in Novemb...

  News    10 January 2020

• CLO losses expected after Constellis default

  Sector developments and company hires

  Constellis losses expected Moody’s warns that, at current prices, Constellis Holdings&...

  Market moves    10 January 2020

• Leasing guarantee

  EFL completes capital relief trade

  The EIF and Europejski Fundusz Leasingowy (EFL) have completed a synthetic securitisation of an unus...

  News    9 January 2020