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.

  • 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
  • Green ILS framework rolled out

    Sector developments and company hires

    EMEA Nick Holman has joined Kartesia to lead investments in the UK from the Kartesia Senior Oppor...

    Market moves    26 February 2020
  • Project Cairo prepped

    Eurobank applies for HAPS guarantee

    Eurobank has applied to the Greek government for a senior tranche guarantee under the Hercules Asset...

    News    26 February 2020
  • GM withdrawal from Aussie autos 'credit negative'

    Sector developments and company hires

    CMBS analytics platform Thetica Systems has launched a web platform for CMBS pricing and analytic...

    Market moves    25 February 2020
  • UK SRT debuts

    Opel prepping full-stack auto ABS

    BNP Paribas is marketing Opel’s second full-stack auto ABS from the E-CARAT programme. Dub...

    News    25 February 2020
  • Social factors

    Positive ESG scores for post-crisis vintages

    ESG relevance scores (ESG.RS) are more likely to be negative for seasoned securitisations, according...

    News    24 February 2020
  • High-profile bankers exit SRT

    Sector developments and company hires

    SRT departures Last week saw a couple of high-profile exits from SRT banking teams in London. Struc...

    Market moves    24 February 2020
  • Rare CMBS prepped

    BofA brings 'one-off' Dutch transaction

    BofA is in the market with a Dutch CMBS, dubbed Taurus 2020-1 NL. The €620.6m deal is the f...

    News    24 February 2020
  • SCI Start the Week - 24 February

    A review of securitisation activity over the past seven days

    REMINDER: SCI NPL Securitisation Awards 2020 Nominations are now open for the inaugural SCI N...

    News    24 February 2020
  • Moving down

    Insurers target first-loss CRTs

    Insurers are now targeting the first-loss tranches of capital relief trades, having eyed the senior...

    News Analysis    21 February 2020
  • SRT fund launched

    AXA engineers return

    AXA Investment Managers has completed its eighth partner capital solutions fund. With the move, the...

    News    21 February 2020
  • Rarity value

    European ABS market update

    The European ABS market remains characterised by a lack of free flow. Against this backdrop, the sen...

    Market Reports    21 February 2020
  • Minority equity interest acquired

    Sector developments and company hires

    Equity interest acquired Affiliated Managers Group has acquired a minority equity interest in Com...

    Market moves    20 February 2020
  • Risk transfer round-up - 20 February

    CRT sector developments and deal news

    Further details have been revealed of CRT transactions that were completed in 4Q19. One is another B...

    News    20 February 2020
  • C-PACE fund debuts

    Standalone platform leads origination

    Samas Asset Management (SAM) has launched its debut fund, a closed-end vehicle dubbed SAMAS FUNDING...

    News    20 February 2020
  • SME double

    EIF closes pair of EFSI guarantees

    The EIF has closed two new guarantee agreements supporting European SMEs, both of which are supporte...

    News    19 February 2020
  • Manager discretion

    Direct lending securitisations on the rise

    A growing number of direct lending funds are raising debt via securitisation of their shares. A care...

    News    19 February 2020
  • Distressed debt unit formed

    Oaktree establishes Chinese subsidiary

    Oaktree Capital Management has become the first foreign distressed debt manager to set up a wholly o...

    News    19 February 2020
  • MPL acquisition to achieve 'regulatory clarity'

    Sector developments and company hires

    Acquisition LendingClub is set to acquire Radius Bancorp and its wholly owned online subsidiary R...

    Market moves    19 February 2020
  • Refinancing strategy

    VW master trusts augment auto ABS volumes

    VW’s issuance of auto ABS from master trust vehicles has been extensive, yet it seems to h...

    News Analysis    19 February 2020
  • Ares co-founder steps down from board

    Sector developments and company hires

    North America Ares Management Corporation has appointed Kipp deVeer to its board. Concurrently, J...

    Market moves    17 February 2020