Asset-Backed Security - ABS

Dictionary Says

Definition of 'Asset-Backed Security - ABS'


A financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. For investors, asset-backed securities are an alternative to investing in corporate debt.

Investopedia Says

Investopedia explains 'Asset-Backed Security - ABS'


An ABS is essentially the same thing as a mortgage-backed security, except that the securities backing it are assets such as loans, leases, credit card debt, a company's receivables, royalties and so on, and not mortgage-based securities.

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