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.

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