Asset Backed Securities
Asset backed securities covers Debt which:
(1) represent an interest in assets, including any rights intended to assure servicing, or the receipt of timeliness of receipts by holders of assets of amounts payable there under; or
(2) are secured by assets and the terms of which provide for payments which relate to payments or reasonable projections of payments calculated by reference to identified or identifiable assets.
Consumer Receivables, Collateralized Debt Obligations (CDO), Loan Participation Notes (LPN) and Whole Business Securitisations are examples of fixed income products that form part of the asset backed securities market.
There are two Recognised Investment Exchanges (RIEs) in the UK which admit asset backed securities to trading:
- the London Stock Exchange (LSE) operates the Regulated Market, and
- the LSE Professional Securities Market (PSM). Securities admitted to these markets will be admitted to the Official List.
- PLUS Markets also operates three markets: PLUS Listed; PLUS Quoted and PLUS Traded.
Under the EU prospectus directive, the issuer must publish a prospectus in relation to the asset backed securities if these are being admitted to trading on an EU regulated market and/or if they are being offered to the public.
When a prospectus is not required under the prospectus directive and the issuer is seeking admission to a listed but unregulated market, eg the PSM, listing particulars regarding the asset backed securities will need to be prepared in line with the relevant listing rules and approved by the Global Debt Group.
Where a prospectus or listing particulars is required, it must be prepared in line with the relevant prospectus and listing rules, and approved by the Global Debt Group.
To be eligible for admission to the Official List, issuers of asset backed securities must meet the requirements set out in LR 2 and LR 17.