Asset-Backed Security
/ˈæsɛtˌbækt sɪˈkjʊrɪti/
Definitions
- (n.) A financial instrument backed by a pool of assets, such as loans or receivables, that entitles holders to payments derived from those assets.
The investor purchased asset-backed securities backed by a portfolio of auto loans.
Forms
- asset-backed securities
Related terms
See also
Commentary
Asset-backed securities are a key product in securitization, transferring asset risk to investors; precise drafting of underlying asset pools is crucial to determine payment streams and legal recourse.
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