SecondMarket, the biggest secondary marketplace for illiquid assets, has formally launched the first centralized market for ABS.
This multi-trillion dollar asset class, which will be run by SecondMarket’s structured products team, resulted from the considerable interest expressed by the firm’s buyer and seller bases, and will help to unlock the secondary market for securitized products backed by different assets.
ABS covers a broad range of products and industries, the most common of which are credit card , automobile and student loan receivables. However, there are various esoteric ABS – leased-back receivables, franchise loans, medical and heavy equipment leases, manufactured housing, to name a few – that will also be trading over SecondMarket.
With its robust trading platform and over 10,000 buyers and sellers, SecondMarket has established itself as a marketplace for a variety of structured products, such as RMBS and CMBS, auction-rate securities and CDOs. Prompted by sustained and growing interest from buyers and sellers, SecondMarket has already completed ABS transactions while examining the feasibility of fully launching a new market.
“We have closely followed this market as pockets have remained largely illiquid, and we believe our experience with an array of structured products will allow us to seamlessly integrate the broader set of ABS into our existing platform,” said SecondMarket CEO Barry Silbert. “The introduction of this market was a natural progression in our effort to create a global secondary platform for illiquid financial assets.”
“Over the past several months, we have seen significant buy- and sell-side interest from our market participants in a variety of securities across multiple sectors,” said Elton Wells, Head of Structured Products at SecondMarket. “The increased demand and completion of numerous ABS deals prompted us to officially launch this new market.”
Aside from structured products, several other asset classes are traded on SecondMarket, including whole loans, private company stock, limited partnership interests, bankruptcy claims and warrants/restricted stock in public companies.
Over $25 billion in assets are currently available for sale on SecondMarket. It is free to access SecondMarket as a buyer or seller.