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.

  • Auto ABS rating withdrawn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    Auto ABS rating withdrawn Fitch has withdrawn the expected ratings of Swiss Car ABS 2020-1 (SCI 9 A...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

    EU banks benefit from Basel 3 delay

    The Basel Committee's decision last week to delay implementation of the final Basel 3 rules...

    News    2 April 2020
  • Development finance

    Securitisation mooted for SME house builders

    SME house builders struggle to access finance, despite being responsible for around 13% of new build...

    News Analysis    2 April 2020
  • CRR compliance for NHG guarantee

    Sector developments and company hires

    EMEA Addleshaw Goddard has hired structured finance partner Rachel Kelly from McDermott Will &...

    Market moves    1 April 2020
  • Real asset focus

    Stephane Delatte, ceo and cio of Pierfront Capital, answers SCI's questions

    Q: How and when did Pierfront Capital become involved in investment? A: Pierfront Capital was estab...

    The Structured Credit Interview    1 April 2020
  • Advancing assistance programme prepped

    Sector developments and company hires

    Advancing assistance mooted Ginnie Mae is tailoring the existing disaster pass-through assistance...

    Market moves    31 March 2020
  • CECL delayed

    EU banks await IFRS 9 relief

    The US Fed, the FDIC and the OCC last week approved an extension of the new credit loss accounting s...

    News    31 March 2020