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.

  • SCI podcast - episode 7 now live

    All the most pressing topics in structured finance discussed

    The latest edition of the SCI podcast is now live. This month, we take a look at servicing within su...

    News    30 May 2019
  • Agency acquisition announced

    Sector developments and company hires

    Agency acquisition Morningstar has entered into a definitive agreement to acquire DBRS, t...

    Market moves    29 May 2019
  • MPL ABS dissected

    Rating agencies clash over sector

    US marketplace loan (MPL) ABS transactions have seen steadily declining credit enhancement (CE) that...

    News    29 May 2019
  • Interpretation issues

    Credit Suisse completes capital relief trade

    Credit Suisse has completed its first capital relief trade of the year, dubbed Elvetia Finance serie...

    News    29 May 2019
  • Investible assets

    Trade finance solution to enable institutional access

    Allianz Global Investors and HSBC are collaborating on a programme designed to make trade finance ea...

    News    29 May 2019
  • STS SRTs pending

    EBA to publish discussion paper on synthetic criteria

    The EBA is set to publish a discussion paper on STS criteria for synthetic securitisations in Septem...

    News Analysis    29 May 2019
  • Co-cio and liquid markets head appointed

    Company hires and sector developments

    Credit expert poached Crestline Investors has appointed Michael Aingorn as an md, based in New Yor...

    Market moves    24 May 2019
  • LeaseCo boost

    Foundation laid for leasing NPL ABS

    Amendments to Italy’s securitisation law are expected to boost securitisations of non-perf...

    News Analysis    24 May 2019
  • Risk transfer round-up - 24 May

    CRT sector developments and deal news

    Santander is believed to be readying a capital relief trade consisting of auto loans for 2Q19. The S...

    News    24 May 2019
  • Positive performance prompts upgrades

    Sector developments and company hires

    Director hired to rebranded CLO platform DFG Investment Advisers has hired John Hwang as a directo...

    Market moves    22 May 2019
  • Real estate upside

    National Bank of Greece opts for NPL ABS

    The National Bank of Greece intends to securitise €3bn of non-performing mortgage loans by...

    News    20 May 2019
  • Goodwill hunting

    Higher recoveries from Interserve insolvency expected

    Interserve became the second UK outsourcer to suffer a credit event in a risk transfer transaction,...

    News Analysis    20 May 2019
  • UK CMBS loan defaults

    Company hires and sector developments

    Euro CMBS 2.0 default Elizabeth Finance 2018 has become the second European CMBS 2.0 deal to suffe...

    Market moves    20 May 2019
  • CLO director nabbed

    Company hires and sector developments

    Europe Hermes Investment Management has hired Kevin Roche as a director for private debt...

    Market moves    17 May 2019
  • US student loan sector 'in crisis'

    Servicers 'unlikely' to handle big rise in distressed loans

    The US student loan ABS sector continues to be dominated by deals backed by FFELP...

    News Analysis    17 May 2019
  • Promising prospect

    Synthetic UTPs contemplated as IFRS 9 hedge

    Synthetic securitisations referencing unlikely-to-pay loans are a more promising prospect than synth...

    News Analysis    17 May 2019
  • Seeking refuge

    NPL securitisation disclosed

    Hoist Finance has confirmed in its latest 2019 interim report that it will securitise part of its no...

    News Analysis    16 May 2019
  • CMBS sees prompt prepayment

    Company hires and sector developments

    Auction platform Mortgage Capital Trading has launched Trade Auction Manager (TAM) to enable more...

    Market moves    16 May 2019
  • Risk transfer round-up - 16 May

    CRT sector developments and deal news

    Caixabank has completed a synthetic securitisation of Spanish SMEs with the European Investment Fund...

    News    16 May 2019
  • Senior appointments abound

    Company hires and sector developments

    Acquisition Priority Income Fund has completed its acquisition of Stira Alcentra Global Credit Fun...

    Market moves    14 May 2019
  • SCI Start the week - 13 May

    A review of securitisation activity over the past seven days

    Transaction of the week Last week saw an unusual Irish CMBS hit the European pipeline, from debut...

    News    13 May 2019