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.

  • Older CLOs underperforming

    Sector developments and company hires

    Older CLOs underperforming A significant proportion of all the US BSL CLOs S&P has on negat...

    Market moves    16 June 2020
  • Take-up rates

    Significant variations across European moratoria

    Payment holidays have so far assisted in deterring defaults during the coronavirus crisis. However,...

    News    15 June 2020
  • SCI Start the Week - 15 June

    A review of securitisation activity over the past seven days

    Last week's stories Addressing inconsistencies Performance metrics switched Calabria confiden...

    News    15 June 2020
  • Californian auto loans eyed

    Sector developments and company hires

    Californian auto loans eyed The Westlake Automobile Receivables Trust 2020-2 issuer has disclosed t...

    Market moves    12 June 2020
  • Strategic review

    Direct lending JV formed

    Newly established investment manager KKV Investment Management has finalised investment management a...

    News    12 June 2020
  • Addressing inconsistencies

    Performance metrics switched

    Metrics that assess the level of portfolio interest and principal cashflows have become more reliabl...

    News    12 June 2020
  • Risk transfer rebound

    Deutsche Bank completes SRT

    Deutsche Bank has completed a US$325m CLN that references a disclosed US$5bn global portfolio of lar...

    News Analysis    12 June 2020
  • Euro ABS 'game changer' recommended

    Sector developments and company hires

    Euro ABS ‘game changer’ recommended The European High-Level Forum (HLF) on the...

    Market moves    11 June 2020
  • LCR eligibility eyed

    Final credit mapping framework awaited

    Prime Collateralised Securities last week withdrew several liquidity coverage ratio assessments on d...

    News    10 June 2020
  • Risk transfer round-up - 10 June

    CRT sector developments and deal news

    Santander has exercised a 10% clean-up call for its Red-1 Finance CLO 2017-1 transaction. The UK com...

    News    10 June 2020
  • Resolve and resilience

    Content sponsored by Ocorian

    James Maitland, regional head of Americas, Bermuda & Caribbean, and global head of capita...

    Talking Point    10 June 2020
  • NCSLT consent judgment denied

    Sector developments and company hires

    NCSLT consent judgment denied Fitch has affirmed 37 notes and maintained its rating watch negative...

    Market moves    9 June 2020
  • Spread compression

    European ABS market update

    The rally in broader risk assets and the lack of new supply has boosted demand for paper in the Euro...

    News    9 June 2020
  • Perfect storm

    Hertz bankruptcy to reshape auto ABS?

    Hertz’s recent bankruptcy is one casualty of a perfect storm caused by a drop in used vehi...

    News Analysis    9 June 2020
  • CLO business integrated

    Sector developments and company hires

    CLO business integrated RBC’s US-based CLO management business is being integrated into B...

    Market moves    8 June 2020
  • HAPS ABS debuts

    Eurobank finalises Cairo transaction

    Eurobank has finalised the first non-performing loan securitisation under the Hercules Asset Protect...

    News    8 June 2020
  • SCI Start the Week - 8 June

    A review of securitisation activity over the past seven days

    FREE - Capital Relief Trades Virtual Panel - LIVE For a discussion on how the Covid-19 fallout has...

    News    8 June 2020
  • Senators seek TALF expansion

    Sector developments and company hires

    Senators seek TALF expansion US Senators Jerry Moran, Martha McSally and Thom Tillis sent a lette...

    Market moves    5 June 2020
  • First steps

    STS synthetics paper receives qualified welcome

    The EBA’s final framework for STS synthetic securitisations has received an overall positi...

    News Analysis    5 June 2020
  • May payments slump

    Forbearances are down for the first time since CARES, but payments by borrowers in forbearance slump

    Last week saw the first net fall in US mortgage forbearances since the beginning of the Covid 19 cri...

    News    5 June 2020
  • Risk transfer round-up - 5 June

    CRT sector developments and deal news

    Sabadell is rumoured to be readying an SME significant risk transfer deal for the second half of the...

    News    5 June 2020