easy · Asset-Backed Securities
What does 'substantive consolidation' refer to in the legal architecture of ABS?
- The pooling of multiple senior tranches into a single 'Super-Senior' bond.
- The requirement that the servicer must consolidate all borrower payments before the monthly distribution date.
- The process of pooling loans with similar interest rates and maturities into a single trust.
- The merging of the SPE's assets and liabilities with those of the originator during a bankruptcy proceeding.
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