ABS are financial instruments backed by a pool of assets, such as loans, leases, credit card debt or receivables. These assets generate cash flows, which are used to pay investors in the securities. ABS are created through a process called securitisation, where the assets are pooled together and sold to a special purpose vehicle (SPV), which then issues the securities. These securities then trade in fixed-income markets.

The value of ABS

Asset-backed securities are an important part of the financial system, providing liquidity and funding for a range of consumer and commercial loans and leases.

ABS offer a way for lenders to free up capital and for investors to gain exposure to different types of assets. They play a crucial role in the financial ecosystem by enhancing liquidity and providing investment opportunities.

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