An Asset-Backed Medium-Term Note (ABMTN) is a financial instrument combining the attributes of medium-term notes and asset-backed securities, typically used to raise capital through securitization.
An asset-backed security (ABS) is a financial instrument that represents a claim on the cash flows generated by a pool of underlying assets, such as mortgages, car loans, or credit-card receivables.
A Collateralized Loan Obligation (CLO) is a complex financial tool that repackages pools of loans, often corporate loans, into different classes of securities to be sold to investors. CLOs provide high returns for investors with an appetite for risk while offering a source of financing for companies.
An Equipment Trust Certificate (ETC) is a financial instrument used in the USA to document loans intended for the purchase of major equipment. The certificate holder has a secured interest in the asset, akin to a mortgage, commonly seen in industries like airlines and shipping.
The Federal Crisis Inquiry Commission (FCIC) was a ten-member panel created by President Barack Obama in 2009 to investigate the causes of the financial and economic crisis in the United States.
Denoting assets or liabilities that do not appear on the balance sheet of a company. Various off-balance-sheet arrangements have been entered into by companies wishing to avoid full disclosure of their assets and liabilities through complex legal agreements, joint ventures, specially created subsidiaries, and structured finance arrangements.
A Real Estate Mortgage Investment Conduit (REMIC) is a special purpose vehicle (SPV) designed to pool mortgage loans and issue mortgage-backed securities (MBS).
Securitization is the process of turning assets into securities by packaging asset cash flows into tradable financial instruments. It involves an originator, a special purpose vehicle, and investors.
A Single Property Ownership Trust (SPOT) allows investors to own shares in a specific property, entitling them to a direct share of the property's income and capital. This forms part of a securitization process and is similar to a Property Investment Certificate (PINC).
A Special Purpose Vehicle (SPV) is a separate legal entity created by a parent company to isolate financial risk. The SPV is often used for a single specific purpose, such as to facilitate complex financial transactions, isolation of assets, and credit enhancement in securitization.
A Special Purpose Vehicle (SPV) or Special Purpose Entity (SPE) is a subsidiary created by a parent company to isolate financial risk. Its legal status as a separate company allows separation of the parent organization from financial risk.
Structured finance refers to the creation of complex debt instruments through methods such as securitization or the incorporation of derivatives to existing instruments. It involves asset pooling, tranching of liabilities, and the creation of special purpose vehicles to mitigate risk.
An exploration of subprime lending: providing loans to borrowers with poor credit ratings. Discussing the risks, costs, and historical implications—especially the role in the 2007-08 financial crisis.
A tranche is a portion or slice of a larger sum of money or a security with differing risk-return profiles used in financial operations such as loans, funding, and securitizations.
A bank loan facility that can be traded between lenders, aimed at reducing the credit risk for the originating bank.
