Asset-backed security (ABS) - Financial definition
Financial acronyms
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Concise definition of the term asset-backed security
Asset-backed securities are securities that are secured by a pool of assets. The originator, usually a bank or other type of financial institution, sells the assets to a special purpose vehicle (SPV) which in turn issues the asset-backed securities to finance the acquisition.
Comprehensive definition of the term asset-backed security
Investors in asset-backed securities receive interest and redeption of principal on their tranches of the securites which are secured by the interest and principal flows from the asset pool.