Asset-backed security: Difference between revisions

Revision as of 10:22, 28 February 2023

Financial Weapons of Mass Destruction™
A guide to the tools of our trade.

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. ^[1]

This wiki frequently includes untutored and probably disrespectful views on matters of US law, regulation and general culture. To be clear: the JC’s predominant purpose is to troll, not to give constructive advice on how to live your life, much less how to organise your regulatory affairs. The JC is not a US attorney, does not want to be one, and claims no great expertise or insight into US securities regulation, other an abiding conviction that it is way, way more complicated than it needs to be, and the benefit of that abstrusity accrues exclusively to those who are US attorneys and the organs of state that are populated by them. If you read this and take it seriously, other than as a source of entertainment, more fool you.

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 :(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 <br>
-(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. <ref>15 USC § 78c(a)(79) Source: https://www.law.cornell.edu/definitions/uscode.php?def_id=15-USC-1398525309-2067023687</ref>}}}}{{us disclaimer}}
+(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. <ref>15 USC § 78c(a)(79) Source: https://www.law.cornell.edu/definitions/uscode.php?def_id=15-USC-1398525309-2067023687</ref>}}{{us disclaimer small}}}}
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