asset-backed security

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Asset-backed security

Asset-Backed Security

A debt security collateralized by some receivables on some credit sale. Common examples of this collateral include receivables on credit cards, automotive loans, and similar assets. Returns on these securities come from customers' payments on their credit cards and other loans that may be backing the securities. Banks and companies package and sell their receivables to investors in order to reduce the risk of loan defaults. See also: Mortgage-backed security.

asset-backed security

A debt security collateralized by specific assets. Although the term applies to any debt backed by identified assets, it generally refers to securities backed by short-term collateral such as credit-card receivables, car loans, and home-equity loans. Because even the most financially strapped companies can hold valuable assets, it is possible for the credit quality of asset-backed securities to be substantially better than the general credit of the company issuing the securities.
References in periodicals archive ?
issued an equipment lease transaction in the public market, creating the first asset-backed security, according to the Dean Witter Asset-Backed Securities Reference Guide.
498,000,000 Class A-2 Floating Rate Asset-Backed Notes, Rated 'AAA'
The introduction of these features, while increasing the complexity of asset-backed structures, has enhanced their marketability to different types of investors by appealing to their differing investment objectives and risk preferences.
Class B asset-backed notes upgraded to 'AA' from 'A';
500,000,000 BAseries, Class A 2001-5 floating-rate asset-backed securities;
The first section describes the mechanics of the securitization process, the structures of asset-backed securities, and the involvement of banking organizations in this process.
has assigned preliminary ratings of 'AAA' (Triple A) to the Class A-2 floating rate asset-backed notes, Class A-3 floating rate asset-backed notes, Class A-4 asset-backed notes, Class A-5 asset-backed notes, and Class A-6 asset-backed notes, and 'AA' (Double A) to the asset-backed certificates issued by Premier Auto Trust 1994-3.
NEW YORK -- Fitch rates JPMorgan Auto Receivables Trust (JPMART) 2007-A asset-backed securities as follows:
23 percent money market asset-backed notes a rating of 'Duff 1+' (One Plus) and 'AAA' (Triple A), the $500,000,000 floating rate asset-backed notes a rating of 'AAA' (Triple A), and the $610,000,000 4.
NEW YORK -- Fitch expects to rate JPMorgan Auto Receivables Trust (JPMART) 2007-A asset-backed securities as follows:
7 billion in outstanding credit cards asset-backed securities (ABS) issued by the Discover Card Master Trust I (DCMT I).
Fitch's rating of the tobacco settlement asset-backed bonds relies on the rating of the U.