Types
There are several main types of structured finance instruments.
- Asset-backed securities (ABS) are bonds or notes based on pools of assets, or collateralized by the cash flows from a specified pool of underlying assets.
- Mortgage-backed securities (MBS) are asset-backed securities the cash flows of which are backed by the principal and interest payments of a set of mortgage loans.
- Residential Mortgage-Backed Securities, (RMBS) deal with Residential homes, usually single family.
- Commercial Mortgage-Backed Securities (CMBS) are for Commercial Real Estate such as malls or office complexes.
- Collateralized mortgage obligations (CMOs) are securitizations of mortgage-backed securities.
- Collateralized debt obligations (CDOs) consolidate a group of fixed income assets such as high-yield debt or asset-backed securities into a pool, which is then divided into various tranches.
- Collateralized bond obligations (CBOs) are CDOs backed primarily by corporate bonds.
- Collateralized loan obligations (CLOs) are CDOs backed primarily by leveraged bank loans.
- Commercial real estate collateralized debt obligations (CRE CDOs) are CDOs backed primarily by commercial real estate loans and bonds.
- Credit derivatives are contracts to transfer the risk of the total return on a credit asset falling below an agreed level, without transfer of the underlying asset.
- Collateralized fund obligations (CFOs) are securitizations of private equity and hedge fund assets.
- Partial Guaranteed Structures (PGS)
- Future Flow TRansactions (FFT)
- Loan Sell Offs (LSO)
Read more about this topic: Structured Finance
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