medium · Asset-Backed Securities abs-core
Under ASC 860, which condition must be met for a transfer of receivables from an originator to an ABS trust to qualify for 'Sale' treatment (derecognition)?
- The transaction must utilize a Master Trust architecture rather than a standalone trust
- The trust must be classified as a REMIC for federal income tax purposes
- The originator must retain a vertical risk retention interest of at least 5% under Dodd-Frank
- The assets must be legally isolated from the reach of the transferor and its creditors
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