SecondMarket Unveils Centralized Marketplace For Asset Backed Securities

Apr 8 2010 | 10:46am ET

SecondMarket, which serves as a secondary marketplace for illiquid assets, has launched what it says is the first centralized market for asset-backed securities.

"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 Barry Silbert, ceo of SecondMarket. "The introduction of this market was a natural progression in our effort to create a global secondary platform for illiquid financial assets."

ABS covers a broad range of products and industries, the most common of which are credit card receivables, automobile loans and student loan securities. However, there are a myriad of other esoteric ABS such as leased-back receivables, franchise loans, medical and heavy equipment leases, and manufactured housing that will also be trading over SecondMarket.

"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."

In addition to 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. More than $25 billion in assets are currently available for sale on SecondMarket.

SecondMarket, which conducted $2 billion in transactions in 2009, has more than 10,000 participants including global financial institutions, regional and community banks, hedge funds, private equity firms, mutual funds, corporations and other institutional and accredited investors.

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