Journal of Banking & Finance Vol. 28 No. 4 2004
What is the value of recourse to asset-backed securities? A clinical study of credit card banks
Abstract
The present paper uses credit card securitization data to show that recourse to securitized debt may benefit short- and long-term stock returns and long-term operating performance of sponsors. Therefore, although recourse violates regulatory guidelines and FASB140, recourse may have beneficial effects for sponsors by revealing that the shocks that made recourse necessary are transitory. Sponsors providing recourse do, however, experience an abnormal delay in their normal issuance cycle around the event. Hence, it appears that the asset-backed securities market is like the commercial paper market, where a firm’s ability to issue is directly correlated with credit quality.
- DOI
- 10.1016/j.jbankfin.2003.10.011
- Volume
- 28
- Issue
- 4
- Pages
- 875-899
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib