uni credit case
Post on 13-Dec-2014
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Mortgage Based Securities
Subprime Sector
Credit Default Swap
Asset Backed Securities
Asset-Backed Securities
– ABS derive their cash flows from a pool of underlying assets• MBS = mortgage backed securities• CARS = certificates for automobile receivables• CARDS = certificates for amortizing revolving debts
(Credit Cards)• HELS = home equity loan securities
Asset-Backed Securities
– The underlying assets generate cash flows of principal and interest which can be repackaged and sold to investors.
Fixed income assets
Principal
Interest
Asset-backed securities
Asset-Backed Securities
– In ABS, the underlying assets are collected into a pool.• Pool assets are standardized.
– The asset pool is placed in trust.– Claims on the cash flows generated by the asset
pool are structured:• Pass-through structures• Multi-class structures
– Securities representing these claims are sold.
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