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 ?
According to an analyst with Barclays Plc (LSE: BARC), the ECB has only limited influence in the Asset Backed Securities market, reports Bloomberg.
Treasury during the global financial crisis in 2008 to jumpstart the frozen Asset Backed Securities (ABS) market.
At Credit Suisse, she worked in fixed income and asset backed securities research, creating many of the models used to price complex derivatives.
When banking organizations securitize their assets and these transactions are treated as sales-that is, there is no recourse back to the banking organization that originate the loans-both the assets and the related asset backed securities (that is, liabilities) are no reflected on the banking organization's balance sheet.
China Development Bank (CDB) has announced a plan to sell asset backed securities, according to Reuters.
China Zhenshang Bank has announced that it is planning to issue asset backed securities.