Latest Mobile ABS Deal Could Herald New Asset Class

Last week, Verizon Wireless issued the first US rated ABS backed by cellphone contracts. The $1.169 billion deal paves the way for a new asset class in the ABS market, according to a recent Reuters article.

With the recent trend of monthly payment plan models in the cellphone industry, the major mobile carriers have huge inventories of contracts ripe for securitization, Reuters explains.

Last February, Moody's Investors Service discussed the unique risks and strengths of ABS backed by mobile phones and said that the phone contract sector could potentially grow into an ABS asset class worth tens of billions of dollars.

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