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.

  • Auto SRT completed

    Innovative direct CLN structure debuts

    Santander has completed its first synthetic significant risk transfer transaction that references a...

    News Analysis    5 July 2019
  • EBRD appoints Greece, Cyprus lead

    Company hires and sector developments

    EBRD hires NPL vet The EBRD has appointed Andreea Moraru to lead its operations in Greece and Cypr...

    Market moves    4 July 2019
  • Helping hand

    Refugee risk-sharing facility inked

    Dutch development bank FMO has signed a pilot bilateral risk-sharing facility under its NASIRA progr...

    News Analysis    4 July 2019
  • Increasing capacity

    Bridging the CRT gap for insurers

    Greater involvement from insurers in capital relief trades should improve any capacity constraints t...

    News Analysis    3 July 2019
  • Pre-summer rush

    European ABS market update

    Activity levels are currently high across the European ABS/MBS and CLO markets and that looks set to...

    Market Reports    3 July 2019
  • Rarely-seen synthetic securitisation revealed

    Transaction references unusual pool of US auto loans

    Santander has issued a rare synthetic securitisation referencing a collateral pool of US pr...

    News    2 July 2019
  • CLO firm boosts research team

    Company hires and sector developments

    CEDE made public AIR Worldwide has published its Catastrophe Exposure Data Exchange (CEDE) databas...

    Market moves    2 July 2019
  • Latest podcast now live!

    Mascots, Japanese CLO investors and STS struggles

    In this month's edition of the SCI podcast, the editorial team get stuck into some interesti...

    News    1 July 2019
  • Wholesale switch

    Creval eyes NPL reduction strategy

    Credito Valtellinese (Creval) has announced a five-year business plan that aims to reduce its non-pe...

    News    28 June 2019
  • ReoCo impact assessed

    Company hires and sector developments

    CMIP acquisition Investcorp Credit Management US has entered into a definitive interest purchase a...

    Market moves    28 June 2019
  • Guarantee inked

    Banco BPM prints first capital relief trade

    The EIF is taking on the risk of Banco BPM’s €55m mezzanine guarantee in connecti...

    News    28 June 2019
  • Commodity opportunities

    Bank expands global SCF activities

    Crédit Agricole recently made a number of senior hires to its structured commodity financ...

    News    28 June 2019
  • Compliance challenges

    STS requirements raise regulatory liability concerns

    The securitisation market now appears to be embracing the new Securitisation Regulation and adapting...

    News Analysis    28 June 2019
  • GSE reform study released

    Sector developments and company hires

    Private credit double announced Solar Capital Partners has hired two senior private credit investm...

    Market moves    27 June 2019
  • CMBS auditing upset

    Sector developments and company hires

    Auditing issue The JUNO (ECLIPSE 2007-2) CMBS failed to file its financial statements for 2017, to...

    Market moves    26 June 2019
  • Aussie Investment principles discussed

    Sector developments and company hires

    Australian business investment principles explored The Australian Office of Financial Management (...

    Market moves    24 June 2019
  • Chinese law firm nabs SF expert

    Sector developments and company hires

    China Han Kun has hired Li Huhuan as partner to the firm’s Shanghai office. Huhuan focus...

    Market moves    21 June 2019
  • Global reinsurance consolidation

    Sector developments and company hires

    HATS 2016-1 redeemed KBRA has withdrawn its ratings from Honor Automobile Trust Securitization 201...

    Market moves    20 June 2019
  • Debut franchise ABS prepped

    Transaction announced despite association objections

    Jack in the Box is marketing an inaugural US$1.450bn whole business securitisation backed by 2,240 f...

    News    19 June 2019
  • Securitised products head retires

    Sector developments and company hires

    Bank SPG head retires Lloyds Bank is making several changes to leadership positi...

    Market moves    19 June 2019
  • DNS debut

    ExteNet preps inaugural securitisation

    The first securitisation backed exclusively by distributed network systems (DNS) assets has hit the...

    News    18 June 2019