Global Asset-Backed Securities Market Report 2019: With ABS Market on the Rebound, Credit Card Issuers Should Understand the Nuances and Benefits of this Financial Product

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Apr 09, 2019, 10:30 ET

DUBLIN, April 9, 2019 /PRNewswire/ -- The "Asset-Backed Securities: A Primer for Credit Card Managers" report has been added to ResearchAndMarkets.com's offering.

Asset-Backed Securities: A Primer for Credit Card Managers, this report is the first analysis of the asset-backed securities (ABS) market since the recession that focuses on the credit card industry.

Readers will learn about the logical and legal flows of credit card asset-backed securities (ABS), an important financing tool used by many top issuers. Asset-backed securitization enables lenders to originate credit card accounts, season their portfolios, and then sell the receivables to bank-owned trusts that enable investors to buy future revenue streams. Credit card issuers can generate servicing fees and then use the funds to reinvest in new accounts. One top-tier bank has 50 percent of its portfolio securitized, which is a key component of its growth strategy.

The report presents a case study of the asset-backed securitization of a credit card portfolio of a major global bank to illustrate the level of analytics covered in an ABS prospectus. One important facet that is apparent is the importance of the FICO Score and the way it is used throughout the credit cycle from origination to credit cycle management and ultimately through securitization, notes the author of the report. He adds: Dodd-Frank brought discipline to the ABS process, and issuers have a requirement to effectively manage their portfolios, particularly as they place blocks of accounts into the capital markets.

Highlights of the research report include:

Asset-backed securitization volumes by issuing bank since the Great Recession
Forecasted market projections through 2023
A view of asset-backed security pricing strategies
An explanation of how funds disperse based on revenue streams
A review of the credit rating process
How credit managers play an important role in the success of ABS
A case study drawn from a major global bank that illustrates the seven key elements of an ABS prospectus

Key Topics Covered:

Executive Summary

Asset-Backed Securities: Lending Giants Become Marketing Machines

Background
And Explode it Did
Asset-Backed Securities: A Simplified Explanation
ABS Purchasers Must be Sophisticated Investors
Putting ABS into Context: Credit Card Receivables
ABS Offerings are not Cookie Cutter Events

Asset-Based Lending: The Logical and Legal Process Flow

The Logical Process Flow of a Credit Card Asset-Back Securitization
The Waterfall: Trusts Define the Trust's Payment Hierarchy
The Legal Flow of an ABS Deal
Credit Rating Agencies Act as Objective Third Parties Since the Wall Street Reforms

The Role of Credit Card Managers and Operations Staff

Seven Important Topics to Look for in a Prospectus
Balance Ranges, Utilization, and Vintage Illustrate Portfolio Risk and Robustness
FICO Scores: The Acid Test for ABS Portfolio Quality

Credit Card ABS Market Outlook

Volume Growth will Continue
What this Means to the Credit Card Industry

References

Related Research
Endnotes

Companies Mentioned

A.M. Best
Alliance Data Services
American Express
Bank of America
Barclays Bank of Delaware
Barclays Capital
Capital One
Chase
Citi
DBRS
Discover
FICO
Fitch
KBRA
Mastercard
Moody's
Morningstar
Scotiabank
Securities and Exchange Commission
Sperry Corporation
Standard & Poor's
Synchrony
TD Securities
US Bank
Wells Fargo Securities

For more information about this report visit https://www.researchandmarkets.com/r/cuoe8s

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SOURCE Research and Markets