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 ?
These are --$110.775 million enhanced tobacco settlement asset-backed bonds, series 2018A.
The government, through Land Bank and DBP, holds an economic interest in MRT-3, by virtue of the government's purchase of asset-backed bonds issued by MRTC's original owners Metro Rail Transit Corp.
Caribbean Financial Group ("CFG"), a consumer finance company that offers unsecured personal loans and related credit insurance products in the Caribbean and Panama, has announced the completion of its inaugural securitization, an issuance of USD 207 million of two-year revolving, asset-backed bonds secured by a pool of its unsecured consumer installment loans, the company said.
Caribbean Financial Group (CFG), a consumer finance company that offers unsecured personal loans and related credit insurance products in the Caribbean and Panama, has said that it has completed its inaugural securitisation, an issuance of USD207m of two-year revolving asset-backed bonds secured by a pool of its unsecured consumer instalment loans.
Companies like Lending Club then often sell packages of the loans to banks that securitize the loans into asset-backed bonds - something Jefferies had been planning to do.
Each manager defines such strategies in its own way, but PIMCO's version of multi-sector fixed income can invest in all sectors of bonds in any geographic market, including government, corporate and asset-backed bonds, as well as bank loans.
There was relief sounded earlier this year when the European Central Bank (ECB) announced that it would buy over $1tn (EUR890m) of sovereign and asset-backed bonds between March 2015 and September 2016.
In 2003, the MRT line's private concessionaire MRT Corp., then owned by the Sobrepena family, decided to cash in on its investment in the train line by issuing asset-backed bonds for future equity rental payments.
Consistent with traditional, negotiated cash-offer practices, underwriters of asset-backed bonds would buy at a discount a specified amount of the offer before reselling to investors.
The central bank said it will conduct refinancing operations and buy asset-backed bonds worth 40 billion euros for a year.
Lloyds TSB, a part of UK's Lloyds Banking Group Plc (LLOY.LN)(LSE: LLOY) (NYSE: LYG) has priced its triple-A rated, asset-backed bonds backed by credit card receivables and denominated in sterling and dollars, Dow Jones has reported, citing one of the banks managing the transaction.
AESOP has closed an offering of USD700m of asset-backed bonds with a weighted average interest rate of 3.2%, and renewed an asset-backed bank conduit facility by expanding its borrowing ability by USD100m.