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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.


  • Opportunistic buying

    Covid-19 kicks off secondary SRT market

    Capital relief trade secondary market activity has received a boost from the coronavirus fallout as...

    News Analysis    28 April 2020
  • European SME ABS struggling

    Sector developments and company hires

    European SME ABS struggling Coronavirus-driven disruption is creating financial difficulties for...

    Market moves    27 April 2020
  • SCI Start the Week - 27 April

    A review of securitisation activity over the past seven days

    Last week's stories Accessing liquidity The role technology plays in securitising trade finance...

    News    27 April 2020
  • Inventory ABS prepped

    Sector developments and company hires

    Inventory ABS prepped Fintech platform Supply@ME Capital (SYME) has entered into an agreement with...

    Market moves    24 April 2020
  • NPL ABS eyed

    Greek banks target HAPS, despite virus crisis

    Greek banks are targeting over €30bn of non-performing loan securitisations in 2020 via the...

    News Analysis    24 April 2020
  • Underperformance underlined

    Italian NPL ABS ratings hit

    Moody’s has downgraded and placed on review for further downgrade the ratings of two notes...

    News    24 April 2020
  • Non-agency CMBS goes it alone

    The non-agency CMBS market is an orphan of the storm

    While a raft of measures to aid liquidity and forestall insolvency have been introduced by the US au...

    News Analysis    24 April 2020
  • Recovery boost

    Weatherford revolvers fully repay amid negative outlook

    A new case study from SCI has revealed that oil and gas firm Weatherford International is referenced...

    News Analysis    24 April 2020
  • Grandfathering for Dutch CLO issuers

    Sector developments and company hires

    Grandfathering for Dutch CLO issuers The Dutch tax authorities have provided written confirmation t...

    Market moves    23 April 2020
  • GSE advancing obligations aligned

    Sector developments and company hires

    GSE advancing obligations aligned The US FHFA has aligned Fannie Mae's and Freddie Mac&...

    Market moves    22 April 2020
  • Accessing liquidity

    Christoph Gugelmann, co-founder of Tradeteq, highlights the role technology plays in securitising tr...

    Access to liquidity is becoming more important than ever; many businesses – both large and...

    Talking Point    22 April 2020
  • SCI Start the Week - 20 April

    A review of securitisation activity over the past seven days

    Last week's stories Bilateral activity Opportunistic capital redeployment underway Coverage...

    News    20 April 2020
  • Interest rate mismatches eyed

    Sector developments and company hires

    Interest rate mismatches eyed Moody’s suggests that loan repricing will increase interest...

    Market moves    17 April 2020
  • Coverage cleared

    Debut programmatic ILW trade executed

    Tremor last week executed what is believed to be the first programmatic ILW trade via an online auct...

    News    16 April 2020
  • CMBS secured, unsecured sub debt weighed

    Sector developments and company hires

    CMBS secured, unsecured sub debt weighed Senior US CMBS loans with unsecured subordinate debt (s...

    Market moves    16 April 2020
  • Discounted opportunities

    Insurers target SRT secondary market

    Insurers are now targeting the capital relief trades secondary market in search of discounted opport...

    News    16 April 2020
  • Auto ABS rating withdrawn

    Sector developments and company hires

    Auto ABS rating withdrawn Fitch has withdrawn the expected ratings of Swiss Car ABS 2020-1 (SCI 9 A...

    Market moves    15 April 2020
  • Bilateral activity

    Opportunistic capital redeployment underway

    The European ABS market appears poised to diverge between central bank-eligible issuance and opportu...

    News Analysis    15 April 2020
  • REMIC tax status clarified

    Sector developments and company hires

    REMIC revenue procedure The US Internal Revenue Service has issued a revenue procedure that permits...

    Market moves    14 April 2020
  • Risk transfer reboot

    Large corporate SRTs prepped

    Capital relief trade issuance is set for a comeback in 2Q20 as a handful of banks are readying large...

    News Analysis    14 April 2020
  • TALF 2.0 eligibility expanded

    Sector developments and company hires

    TALF 2.0 eligibility expanded The US Fed has expanded the range of assets that are eligible collate...

    Market moves    9 April 2020