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Asset-Backed Bond |
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Asset-Backed Bond A bond in which the coupons are guaranteed by the receivables on some liability owed to the issuer. For example, a mortgage-backed security is a debt security in which the holder lends money (the price of the security) to the issuer in exchange for the right to the receivables on the mortgages underlying the security. In other words, an asset-backed bond is a security structured in a way that the issuer sells the rights to receive some debt the issuer is owed. See also: Sukuk. Asset-backed bond. Asset-backed bonds, also known as asset-backed securities, are secured by loans or by money owed to a company for merchandise or services purchased on credit. For example, an asset-backed bond is created when a securities firm bundles debt, such as credit card or car loans, and sells investors the right to receive the payments made on those loans. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| ? Mentioned in | ? References in periodicals archive | |
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| Lesson 6: The holder of an asset-backed bond is not affected by the non-performance of the sponsor''s other assets; an ordinary secured bondholder is. Fears have risen over the long-awaited refinancing of the debt through a planned securitisation after the credit crisis effectively closed the European asset-backed bond market, with many predicting it will not reopen until the second half of 2008. Malaysia is reportedly in the process of launching the first Islamic asset-backed bond, where investors would receive a portion of the lease rental stream. |
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