[Verse 1] When companies need cash but have debts to collect Credit cards and auto loans they can't neglect Student loans and equipment leases in their books They bundle up these assets with creative looks [Chorus] Asset-backed securities, A-B-S today Credit Card, Auto, Student - C-A-S we say Pool the loans together, slice them into parts Investors get the payments, it's financial arts A-B-S, A-B-S, non-mortgage all the way Credit Card, Auto, Student - C-A-S we say [Verse 2] Credit card receivables, they're short and they revolve People pay their balances, problems they resolve Monthly payments flowing in, but balances can grow Prepayment risk is lower than mortgages we know [Chorus] Asset-backed securities, A-B-S today Credit Card, Auto, Student - C-A-S we say Pool the loans together, slice them into parts Investors get the payments, it's financial arts A-B-S, A-B-S, non-mortgage all the way Credit Card, Auto, Student - C-A-S we say [Verse 3] Auto loans are different, they're fixed with steady terms Three to seven years usually, the payment pattern confirms Cars depreciate quickly, so loan-to-value falls If borrowers default early, less loss for one and all [Bridge] Student loans are special, government often backs them Income-driven payments and forbearance doesn't lack them Longer terms than auto loans, but rates are usually low Educational investment helps the economy grow [Chorus] Asset-backed securities, A-B-S today Credit Card, Auto, Student - C-A-S we say Pool the loans together, slice them into parts Investors get the payments, it's financial arts A-B-S, A-B-S, non-mortgage all the way Credit Card, Auto, Student - C-A-S we say [Outro] Tranches ranked by seniority, senior gets paid first Subordinate takes losses when the loans are at their worst A-B-S diversification spreads the risk around Asset-backed securities, the smartest game in town
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