asset-backed
Loans with collateral
Asset-backed describes securities or loans whose value derives from underlying assets rather than the issuer's general creditworthiness.
The assets—mortgages, car loans, credit card debt, or other receivables—serve as collateral: asset-backed securities, asset-backed commercial paper.
If borrowers default, holders have claims on those specific assets.
Bundling debts into investable instruments
- tranchesPortions of a whole
- bondsTies that unite
- collateralizedBacked by pledged assets
- structuredArranged in organized form
ABS · CDO · pooling · issuance · originator · servicer · tranche · waterfall
Borrowed money repaid later
- borrowerOne who takes temporarily
- lenderOne who loans money
- financingProviding capital for purchases
- creditworthinessAbility to repay debts
repayment · default · amortization · principal · interest · refinance · leverage · facility
Secured home loan
- propertySomething owned or inherent
- equityImpartial treatment or ownership value
- lienClaim securing debt
- pledgeBinding promise given
title · valuation · appraisal · foreclosure · repossession · encumbrance · deed · escrow
securitization
Bundling debts into investable instruments
- tranchesPortions of a whole
- bondsTies that unite
- collateralizedBacked by pledged assets
structured · ABS · CDO · pooling · issuance · originator · servicer · tranche · waterfall · pass-through
loan
Borrowed money repaid later
creditworthiness · repayment · default · amortization · principal · interest · refinance · leverage · facility · covenant
mortgage
Secured home loan
- propertySomething owned or inherent
- equityImpartial treatment or ownership value
- lienClaim securing debt
pledge · title · valuation · appraisal · foreclosure · repossession · encumbrance · deed · escrow · underwriting
trading
Exchanging for value
- investorsThose who commit capital
- liquidityConvertibility to cash
- derivativesThings derived from another
hedging · portfolio · pricing · spread · benchmark · issuers · underwriters · placement · demand · supply
- investmentsbonds, stocks, securities, investment, equities
- mortgage termsmortgages, home loans, foreclosure, lien, interest rates
- pledgesvow, promise, I promise, wedding vows, I vow
asset-backedunsecured
Not backed by collateral
uncollateralized · unbacked · unguaranteed · naked · signature loan