English Language Tests-Intermediate level''''s archiveAsset Backed Securities pptx

Firstly, they gain exposure to a liquid, fixed income investment in a diversified pool of assets, such as auto loans, which make .... alternative to a corporate bond or other fixed incom

English Language Tests-Intermediate level's archive

Asset Backed Securities

1 Ope Agbaje, the ABS analyst at CSAM, goes on to

explain that there are a number of important advantages

for investors asset backed securities

filing

holding

keeping

seeking

2 Firstly, they gain exposure to a liquid, fixed income

investment in a diversified pool of assets, such as auto

loans, which make alternative to a corporate bond

or other fixed income investment

a lucrative

an attractive

an elective

a seductive

3 In some cases assets, or assets which investors

would not ordinarily have access to, such as loans to small

and medium enterprises, make up the pool of assets

bound

fixed

illiquid

restricted

4 However, unlike unsecured bonds, which are fully

dependent on the operating, payment ability and ultimately

bankruptcy risk of a company, asset backed securities to

various degrees tend to be (fully or partly) from

those risks

excluded

exclusive

remote

removed

5 Typically, they are legally separated from the originator

and rely entirely on the performance of the ring-fenced

assets, transferred and as bond collateral

guaranteed

pledged

sworn

vowed

6 Simply put, the investor buying the securities is not

to the credit risk associated with originator of the

assets and, thus, ABS bonds represent one of the more

secure forms of fixed income securities from a credit

quality standpoint

engaged

entailed

exposed

extended

7 A number of ABS issues also benefit from external

protection in the form of insurance, such as a credit

enhancement provider that ensures the quality of the

issue, as well as a liquidity provider that covers certain

cashflow

overruns

shortcomings

shortfalls

windfalls

8 A further benefit for the investor is that the risk

associated with consumer credits, such as credit cards

and home loans, can be more easily calculated using

advanced quantitative techniques, without the same level

of often associated with other fixed income debt

such as corporate bonds

accuracy

objectivity

subjectivity

subtlety

9 This is because a statistical approach can be more

relevant for some asset back bonds that have a

underlying collateral consisting of thousands of loans

disparate

homogenous

motley

unique

10 While ABS bonds have long been a key component of

many fixed income strategies, the search for new sources

of have led many investors to the ABS market

assets

income

interest

yield