A financial security (and a type of derivative) that is collateralized by a pool of underlying assets. Those assets could be loans, leases, credit card debts, royalties, or receivables. The assets used to “back” this type of securities are by nature Illiquid or non-tradable. Therefore, a securitization process is carried out to increase their marketability (by establishing a secondary market for such assets). The pooling of assets helps issuers achieve economies of scale and diversification.

It is known for short as ABS.