Asset Backed Securities (ABS) – products of the securitisation process sold in capital markets. Three types of asset securities include: Mortgage Backed Securities (MBS) – backed by mortgages Collateralised Debt Obligations (CDO) – backed by bonds Collateralised Loan Obligations (CLO) – backed by loans Securitisation – refers to the process of pooling and repackaging homogenous illiquid assets into marketable securities which are eventually sold to investors. Trust – private agreement between parties. Special Purpose Vehicles (SPVs) are trusts created for the purposes of securitisation transactions. In pass-throughs, the interests earned on receivables are passed onto investors with SPVs used as … Continue reading Executive Glossary – On Securitisation Markets