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ABS

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.


  • 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
  • SCI Start the Week - 17 February

    A review of securitisation activity over the past seven days

    REMINDER: SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SC...

    News    17 February 2020
  • ArrowMark acquires investment platform

    Sector developments and company hires

    Acquisition ArrowMark Partners has acquired the bank investment platform and assets of StoneCastle...

    Market moves    14 February 2020
  • Secured versus unsecured

    Early-stage MPL delinquencies predictive of charge-offs

    Given that a secured loan lender has the right to seize the collateral securing the loan to recoup b...

    News    14 February 2020
  • Positive outlook

    Spanish REO boost expected

    The outlook for Spanish non-performing loan transactions backed by repossessed real estate appears p...

    News Analysis    14 February 2020
  • Futura placed

    European ABS market update

    JPMorgan has placed the re-offered Futura 2019 NPL ABS at a wider print than some market participant...

    Market Reports    14 February 2020
  • Italian private market JV inked

    Sector developments and company hires

    EMEA Oxane Partners has appointed Andrew Tisdall as director, portfolio management solutions. Tis...

    Market moves    13 February 2020
  • Risk transfer round-up - 13 February

    CRT sector developments and deal news

    Mediobanca is readying another capital relief trade in addition to its inaugural SRT that will close...

    News    13 February 2020
  • Diversified play

    Rate improvements driving ILS pick-up

    Reinsurance rate improvements are precipitating new investor interest in and fund reallocations to t...

    News    13 February 2020
  • Risk transfer boost

    CRT issuance breaks record

    Capital relief trade issuance broke a record in 2019, with volumes reaching €7.5bn. This ma...

    News Analysis    13 February 2020
  • CRT upgraded due to 'substantial' increase in CE

    Sector developments and company hires

    Canadian MBS ETF BMO Asset Management has launched a new stable of ETFs trading on the TSX, inclu...

    Market moves    12 February 2020
  • CMBS trustee assumption refuted

    Sector developments and company hires

    EMEA Michael Newell has joined Cadwalader, Wickersham & Taft as a partner in London. A me...

    Market moves    10 February 2020
  • SCI Start the Week - 10 February

    A review of securitisation activity over the past seven days

    SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SCI NPL Securitisa...

    News    10 February 2020
  • Sporadic issuance

    CQS SRT wave unlikely

    BNP Paribas arranged Amalia, Banca Nazionale del Lavoro’s landmark synthetic securitisatio...

    News Analysis    10 February 2020
  • EBA reports pending

    Trapped excess spread requirement could be dropped

    The EBA will finalise its approach to significant risk transfer this year through the publication of...

    News Analysis    7 February 2020
  • Risk transfer round-up - 7 February

    CRT sector developments and deal news

    Bank of Scotland (BOS) is in the market with Syon Securities 2020, its second UK mortgage SRT (SCI 2...

    News    7 February 2020
  • Syon Securities priced

    Bank of Scotland engineers return

    Bank of Scotland has priced a seven-year financial guarantee that references a £550m portf...

    News    7 February 2020
  • Tightening trend

    European ABS market update

    Appetite for European ABS paper continues to be strong. The market is currently characterised by a d...

    Market Reports    7 February 2020
  • GSE Libor transition deadlines released

    Sector developments and company hires

    ECOWAS prepping ABS The Commission of the of the Economic Community of West African States (ECOWAS)...

    Market moves    6 February 2020