This commentary provides additional insight into how S&P Global (China) Ratings considers consumer asset-backed securities (ABS) in China. Our approach to analyzing consumer ABS is consistent with our general Structured Finance Rating Methodology.
Consumer ABS portfolios are generally collateralized by assets with relatively small balance and homogenous characteristics. The portfolios typically comprise a large number of obligations and a diverse range of obligors. We typically assess the creditworthiness of consumer ABS based on our estimation of the potential losses that may be incurred on a pool of non-real estate consumer assets and the impact of structural features on cash flows under various stress scenarios.
