Asset-backed security

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Top Trumps®Financial Weapons of Mass Destruction® ABS “Tax havens! Derivatives! Bearer paper!” Docs Secured MTN. Heavy, but dreary. 7 Amendability Fat chance. If you don’t like it, ummm — well, what did you buy it for? 0 Collateral Fully funded, backed with juicy second mortgages on residential homes in suburban Reno? Yum Yum. 7 Transferability Bearer paper right? Good luck with that. Buy ABS, get stuck with it. 7 Leverage Usually not, but skip down the tranches and just maybe! 4 Fright-o-meter Can frighten the bejesus out of those of a nervous disposition. But bark worse than bite. 5

Asset-backed security — The term “asset-backed security”— (A) means a fixed-income or other security collateralized by any type of self-liquidating financial asset (including a loan, a lease, a mortgage, or a secured or unsecured receivable) that allows the holder of the security to receive payments that depend primarily on cash flow from the asset, including— (i) a collateralized mortgage obligation; (ii) a collateralized debt obligation; (iii) a collateralized bond obligation; (iv) a collateralized debt obligation of asset-backed securities; (v) a collateralized debt obligation of collateralized debt obligations; and (vi) a security that the Commission, by rule, determines to be an asset-backed security for purposes of this section; and (B) does not include a security issued by a finance subsidiary held by the parent company or a company controlled by the parent company, if none of the securities issued by the finance subsidiary are held by an entity that is not controlled by the parent company.

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See also

• US private placement‎‎
• Covered bond
• Repackaging
• Securitisation
• Espievie