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.


  • Job swaps round-up - 26 May

    North America SFIG has hired Covell Adams as chief administration officer and Scott Brody as direc...

    Job Swaps    26 May 2017
  • MPL ABS event to explore regulatory implications

    Industry participants will gather in New York on 22 June to discuss the major issues in marketplace...

    Talking Point    26 May 2017
  • VW's Spanish auto ABS breaks new ground

    Volkswagen Financial Services has placed the largest Spanish auto ABS since the financial crisis and...

    News    25 May 2017
  • CEA completes its largest ILS yet

    The California Earthquake Authority (CEA) has completed its largest ever ILS (see SCI 22 May). The U...

    News    24 May 2017
  • Investors overweight RMBS

    Investors are moving out of consumer ABS and into US non-agency RMBS, agency RMBS and cash, accordin...

    News    23 May 2017
  • Global interest in Euro SF surges

    The number of investors in European securitisations is ramping up and transactions are increasingly...

    News    22 May 2017
  • BoC debuts first 'restructured' NPL sale

    Bank of Cyprus, Cyprus's largest lender, has sold approximately €20m of restructured non-p...

    News Analysis    22 May 2017
  • SCI Start the Week - 22 May

    A look at the major activity in structured finance over the past seven days.

    Pipeline There were 11 ABS deals added to the pipeline last week. These were joined by an ILS, six...

    News    22 May 2017
  • Job swaps round-up - 19 May

    CDO manager transfers Dock Street Capital Management has replaced Vertical Capital as portfolio ad...

    Job Swaps    19 May 2017
  • Regulatory proposal for SPVs 'credit negative'

    Proposed European regulatory changes to classify SPVs as financial counterparties have created signi...

    News    19 May 2017
  • Risk transfer round-up - 19 May

    Sources expect three true sale significant risk transfer trades to be issued by Italian banks this y...

    News    19 May 2017
  • STS discussions stumble on hierarchy

    The Strasbourg Trilogue discussions on simple, transparent and standardised (STS) securitisation hav...

    News Analysis    19 May 2017
  • Subprime underwriting differences revealed

    Regulation AB 2 loan-level disclosures have shed light on performance differences across transaction...

    News    18 May 2017
  • Atlante momentum waning?

    Italian bank rescue fund Atlante II has completed the purchase of its debut €2.2bn non-per...

    News    17 May 2017
  • Premium finance debut ABS lined up

    Premium Credit is bringing to market is first term ABS, an unusual deal backed by premium finance co...

    News    16 May 2017
  • IFRS 9 to spur 'underperforming' loan sales

    The implementation of IFRS 9 is expected to increase provisioning for a new loan category dubbed 'un...

    News Analysis    15 May 2017
  • SCI Start the Week - 15 May

    A look at the major activity in structured finance over the past seven days.

    Pipeline There was a bit more variety to the pipeline's additions last week, although ABS once agai...

    News    15 May 2017
  • Risk transfer round-up - 12 May

    Risk transfer activity has rebounded this week, with the EIF's landmark Spanish portfolio guarantee....

    News    12 May 2017
  • Job swaps round-up - 12 May

    Amicus briefs The LSTA has joined The Clearing House and the American Bankers Association to file...

    Job Swaps    12 May 2017
  • Landmark portfolio guarantee inked

    The EIF has agreed to guarantee 50% of a €5.52bn Spanish SME credit portfolio originated b...

    News Analysis    12 May 2017
  • Insurer hits mark with first cat bond

    Palomar Specialty Insurance Company has successfully closed its first cat bond obtaining protection...

    News    11 May 2017