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.

  • Dutch VAT grace period mulled

    Sector developments and company hires

    Alhambra missed payment A borrower of a €10m loan securitised in the Alhambra SME Funding...

    Market moves    10 March 2020
  • Insurance giants set to combine

    Sector developments and company hires

    Insurer combination agreed Aon and Willis Towers Watson have agreed to combine in an all-stock...

    Market moves    9 March 2020
  • SCI Start the Week - 9 March

    A review of securitisation activity over the past seven days

    Transaction of the week AmTrust International has completed its inaugural capital relief trade, whi...

    News    9 March 2020
  • Climate risk

    Climate impact reporting at early stages

    Banks have committed to disclose their climate risk exposures, as recommended three years ago by the...

    News    6 March 2020
  • NPL reductions eyed

    Greek liquidation law set to facilitate securitisation

    Non-performing loan securitisations are expected to be the primary tool for NPL reductions in Greece...

    News Analysis    6 March 2020
  • Virus-related volatility

    European ABS market update

    The European securitisation market appears to be being affected by coronavirus-related volatility. S...

    Market Reports    6 March 2020
  • Opaqueness premium

    Regulatory RWA variability highlighted

    In its latest Working Paper, the BIS unveils a new measure of risk-weighted asset variability &n...

    News    4 March 2020
  • Bulgarian micro loan guarantees inked

    Sector developments and company hires

    Bulgarian guarantees The EIF has signed new guarantee agreements with Unicredit Bulbank, United Bul...

    Market moves    4 March 2020
  • Game changer?

    FDIC rule change to boost bank securitisation

    In what is seen as a fillip to bank issuers of securitised paper, the FDIC has relaxed its so-called...

    News    4 March 2020
  • IRPH index ruling 'credit negative'

    Sector developments and company hires

    CMBS property sales KBRA has been notified of the sale of 29 properties in the Eos (ELoC No. 35) CM...

    Market moves    3 March 2020
  • Performance issues

    Italian NPL ABS business plans scrutinised

    A recent analysis of 19 Italian non-performing loan securitisations reveals that 15 of these transac...

    News    3 March 2020
  • Green light

    OCC gives regulatory approval to JPM CRT

    JP Morgan Chase has won favourable regulatory treatment from the Office of the Comptroller of the Cu...

    News Analysis    3 March 2020
  • Pandemic cat bonds triggered

    World Bank ILS could encourage further issuance

    The current Coronavirus (COVID-19) outbreak will likely trigger pay-outs for US$132.5m in pandemic c...

    News Analysis    3 March 2020
  • DLT litigation ABS on the cards

    Sector developments and company hires

    Acquisition Pretium Partners has acquired the investment management business of Latigo Partners....

    Market moves    2 March 2020
  • Provisioning hedge

    Landmark Italian SRT inked

    AmTrust International has completed its inaugural capital relief trade, which references a &euro...

    News    2 March 2020
  • NPL recognition delayed

    Chinese SMEs supported amid Coronavirus outbreak

    Chinese regulators are allowing the country’s banks to delay the recognition of non-perfor...

    News    2 March 2020
  • SCI Start the Week - 2 March

    A review of securitisation activity over the past seven days

    New MRT report SCI has published a new Special Report on the US Mortgage Risk Transfer sector &...

    News    2 March 2020
  • Risk transfer round-up - 28 February

    CRT sector developments and deal news

    Banca Monte dei Paschi di Siena is rumoured to be readying an SME SRT for next month, with the count...

    News    28 February 2020
  • Diversification offered

    European ABS market update

    The European ABS pipeline is swelling in the run-up to March. Newly announced deals are providing so...

    Market Reports    28 February 2020
  • Brexit question

    UK and EU STS regimes could diverge

    The end of the Brexit transition period on 31 December 2020 will call into question the STS status o...

    News Analysis    28 February 2020
  • MSR subservicing transfer agreed

    Sector developments and company hires

    EMEA Michael Fiebig has been appointed coo at responsAbility Investments. Fiebig will be responsi...

    Market moves    27 February 2020