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Tag >> asset-based lending
Jun 29

Asset-based lending and asset-backed securitization pick up

Posted by Karen1 in SifmaCFAasset-based lendingasset backed


One more sign that the economy is stabilizing: nearly one-third of asset-based lenders, which includes banks and other commercial lenders, reported an increase in new credit commitments during the first quarter of 2010. That's according to the Quarterly Asset-Based Lending Index compiled by the Commercial Finance Association (CFA). What's more, respondents also reported a slight decrease in write-offs and non-accruing loans, along with a small jump in credit line utilization, says Andrej Suskavcevic, chief executive officer with the CFA. "We're seeing across the board greater volume and better quality deals," Suskavcevic says. As their name suggests, asset-based loans are loans that are backed by the borrower's assets, such as accounts receivable, inventory or equipment. 

That's not to say that asset-based loan market is immune to forces in the larger economy. At the end of 2009, asset-based loans outstanding totaled $480 billion, a drop of almost 20 percent from 2008's high of $590 billion, and the lowest level since 2005, also according to the CFA.

May 07

Receivables finance alive and kicking

Posted by dbedell in securitizationreceivables financeliquidityfuture flow securitizationCashasset-based lending


All types of asset-backed financing faced some issues during the crisis, and asset-backed receivables finance is no exception. Regardless of the strength of the underlying collateral, investors pulled away from any type of risk that had the stench of ABS and either held onto their money or put it in products perceived as more secure.

As a result, receivables securitization and asset-based lending saw issuance drop and spreads widen during the height of the crisis. Yet the strength of the underlying collateral shone through, and even being touched by the taint of monoline involvement hasn’t stopped new issuance and new receivables-backed models from returning to the fore.

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