What Is An Asset-Backed Security? – St. Thomas Libraries Blog
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What Is An Asset-Backed Security?

Ever wondered?  Below is a sample of UST Libraries resources you can use to answer this question.

Here’s an answer from Oxford Handbook of International Financial Terms, one of our most useful resources for usable definitions of financial terms:Oxford Handbook of International Financial Terms

asset-backed.   Generic term for securities or financing methods where the underlying obligation and the source of interest and principal repayment is the cash flow from a particular financial asset or a portfolio (pool) of financial assets. Examples of asset-backed securities include receivables from commercial loans, credit cards, auto loans, real estate, inventory financing, and other securities (cf. mortgage-backed). The key factor in putting together such securities is the ability to differentiate or pool specific income producing assets so as to establish a legitimate legal claim or lien thereon.

How did I get here?  Follow these steps.

  1. Reference resources search for “finance”  (without quotes) in All of St Thomas/electronic only
  2. Scroll through results to Oxford Handbook of International Financial Terms
  3. Search for “asset-backed” (without quotes)
  4. Scroll through results, which include asset-backed, asset-backed security, asset-backed finance, asset-backed commercial paper, mortgage-backed, and other related terms.asset backed search results

What if these definitions aren’t enough?

  1. Chapters of The Handbook of Fixed Income Securities are available in the reference section of the Keffer Library, offer some great explanation and insight.
  2. Can’t get to the Keffer Library?  Try this e-book, The Handbook of Financial Instruments.  Chapters 14 to 20 explain simple, direct language about collateralized debt obligations, agency and non-agency mortgage-backed securities, and more in clear and understandable terms.

Well, what’s happening with asset-backed finance in the world right now?

  1. Good question!  Here’s a great Financial Times article from April 21 about how investors are re-evaluating the US mortgage market.
  2. Want some more articles like this?  Go to Factiva and follow these steps: factiva search
    1. In the Free Text box, type “asset-backed” (without quotes)
    2. In the Subject section below the Free Text box, click on “subject”
    3. Click the + beside Corporate/Industrial News
    4. Scroll to Funding/Capital and click the word so that it shows up in pink above the selection field
    5. Click the Run Search button
    6. You’ll get a lot of results.  Look for articles with titles like “Why REITs Could Lead Mortgage-Backed Comeback” or “ECB Moves to Restore Confidence in Securitisation” to get a good overview of what investment banks, investors, and even regulatory agencies are doing in asset-backed financing.
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