hard · Asset-Backed Securities regulatory

Which requirement is the genuinely binding structural constraint that distinguishes a master-trust add-on series from a standalone ABS issuance?

1. The new series may be issued only if, after giving effect to it, the transferor (seller's) interest still meets its minimum percentage and the rating agency condition confirms existing series' ratings are not downgraded, because all series share collateral and a new series cannot dilute the credit support of outstanding series.
2. The new series may be issued freely so long as it is rated at least as highly as the most senior outstanding series currently in the trust structure, because senior-most rating parity across the entire capital structure is the only master-trust issuance gating test that regulators and rating agencies actually apply in practice.
3. The new series requires 100% unanimous consent of all existing series noteholders before it can lawfully be issued, since adding any new series to a shared pool of receivables legally subordinates their claims and automatically triggers a unanimous-amendment provision written into the master trust agreement itself.
4. The new series must be collateralized by a carved-out, fully segregated sub-pool consisting only of newly added receivables, so that the new series has no claim on the receivables backing existing series, thereby eliminating any cross-series dilution concern that a shared-pool master trust structure would otherwise create for investors.

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