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.

  • Bank nabs CLO expert

    Company hires and sector developments

    Mizuho has hired Stefan Stefanov as director, Euro CLO specialist and he will report in to Juan-Carl...

    Market moves    31 May 2019
  • STS not yet 'embraced'

    Ambiguity stifling STS label success

    Uptake of the STS label has been tentative and cannot be credited with the current strong momentum i...

    News Analysis    31 May 2019
  • Pillar prepped

    Public Greek NPL ABS debuts

    DBRS has provided the first public rating for a non-performing loan securitisation in Greece as the...

    News Analysis    31 May 2019
  • NPL securitisations eyed

    Fire, StormHarbour JV granted license

    Greek authorities have granted a license to EuPraxis, the joint venture between Italian servicer Fir...

    News Analysis    31 May 2019
  • Indian RMBS market in the works?

    Sector developments and company hires

    Alt sales head hired Schroders has hired Peter Arnold to lead its alternative sales unit, which wa...

    Market moves    30 May 2019
  • SCI podcast - episode 7 now live

    All the most pressing topics in structured finance discussed

    The latest edition of the SCI podcast is now live. This month, we take a look at servicing within su...

    News    30 May 2019
  • Agency acquisition announced

    Sector developments and company hires

    Agency acquisition Morningstar has entered into a definitive agreement to acquire DBRS, t...

    Market moves    29 May 2019
  • MPL ABS dissected

    Rating agencies clash over sector

    US marketplace loan (MPL) ABS transactions have seen steadily declining credit enhancement (CE) that...

    News    29 May 2019
  • Interpretation issues

    Credit Suisse completes capital relief trade

    Credit Suisse has completed its first capital relief trade of the year, dubbed Elvetia Finance serie...

    News    29 May 2019
  • Investible assets

    Trade finance solution to enable institutional access

    Allianz Global Investors and HSBC are collaborating on a programme designed to make trade finance ea...

    News    29 May 2019
  • STS SRTs pending

    EBA to publish discussion paper on synthetic criteria

    The EBA is set to publish a discussion paper on STS criteria for synthetic securitisations in Septem...

    News Analysis    29 May 2019
  • Co-cio and liquid markets head appointed

    Company hires and sector developments

    Credit expert poached Crestline Investors has appointed Michael Aingorn as an md, based in New Yor...

    Market moves    24 May 2019
  • LeaseCo boost

    Foundation laid for leasing NPL ABS

    Amendments to Italy’s securitisation law are expected to boost securitisations of non-perf...

    News Analysis    24 May 2019
  • Risk transfer round-up - 24 May

    CRT sector developments and deal news

    Santander is believed to be readying a capital relief trade consisting of auto loans for 2Q19. The S...

    News    24 May 2019
  • Positive performance prompts upgrades

    Sector developments and company hires

    Director hired to rebranded CLO platform DFG Investment Advisers has hired John Hwang as a directo...

    Market moves    22 May 2019
  • Real estate upside

    National Bank of Greece opts for NPL ABS

    The National Bank of Greece intends to securitise €3bn of non-performing mortgage loans by...

    News    20 May 2019
  • Goodwill hunting

    Higher recoveries from Interserve insolvency expected

    Interserve became the second UK outsourcer to suffer a credit event in a risk transfer transaction,...

    News Analysis    20 May 2019
  • UK CMBS loan defaults

    Company hires and sector developments

    Euro CMBS 2.0 default Elizabeth Finance 2018 has become the second European CMBS 2.0 deal to suffe...

    Market moves    20 May 2019
  • CLO director nabbed

    Company hires and sector developments

    Europe Hermes Investment Management has hired Kevin Roche as a director for private debt...

    Market moves    17 May 2019
  • US student loan sector 'in crisis'

    Servicers 'unlikely' to handle big rise in distressed loans

    The US student loan ABS sector continues to be dominated by deals backed by FFELP...

    News Analysis    17 May 2019
  • Promising prospect

    Synthetic UTPs contemplated as IFRS 9 hedge

    Synthetic securitisations referencing unlikely-to-pay loans are a more promising prospect than synth...

    News Analysis    17 May 2019