Asset-backed bond

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 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.

References in periodicals archive ?

-Societe Generale's German arm launches EUR500m asset-backed bond sale

35m asset-backed bond, Dow Jones has reported, citing a person familiar with the matter.

-Sallie Mae prices USD812.35m bond issuance

Ford Motor Company (NYSE: F), a United States-based automaker, has increased the size of its asset-backed bond to USD880m, Wall Street Journal has reported citing a source familiar with the deal.

-Ford Motor Company increases size of asset-backed bond

Avis Budget Group Inc (NYSE: CAR), a US-based company that offers vehicle rental services, has announced that its Avis Budget Rental Car Funding LLC (AESOP) subsidiary has completed an asset-backed bond offering.

-Avis Budget Group Closes Finance Offering

The deal, in the form of an asset-backed bond issue, is a first for showbusiness and the bond market.

Bowie's on rock market

Gracechurch Card Funding, through which Barclays Capital (LSE: BARC) (NYSE: BCS) securitises UK Barclaycard receivables, is planning to issue a USD500m asset-backed bond, Dow Jones has reported, citing a person familiar with the matter.

-Barclays plans USD500m ABS bond issuance

Telewest, which supplies a telecommunication service across Merseyside and the North West was also reported to be planning to launch an asset-backed bond early in the new year, aiming to raise around pounds 200m.

Telewest no plans for NTL merger

Bank of America boosts asset-backed bond sales

ECB may encourage asset-backed bond market

US sub-prime loans effectively poisoned asset-backed bonds as struggling American borrowers defaulted on their repayments, which then triggered the crippling global credit squeeze and subsequent banking meltdown.

Bond launch marks RBS mortgage market return

The SEC's staff agreed late Thursday to temporarily suspend a rule requiring that deal documents for asset-backed bonds include credit agencies' ratings of the bonds.

United States : 4th Ford Credit Issues $1 Billion Bond After ABS Market Compromise