PT  - JOURNAL ARTICLE
AU  - David K Heike
AU  - Akhil Mago
TI  - The ABCs of HELs
AID  - 10.3905/jfi.2005.523087
DP  - 2005 Jun 30
TA  - The Journal of Fixed Income
PG  - 5--27
VI  - 15
IP  - 1
4099  - https://pm-research.com/content/15/1/5.short
4100  - https://pm-research.com/content/15/1/5.full
AB  - The home equity loan (HEL) sector has grown exponentially since 2002, to form the largest component of the asset-backed securities market. Their high liquidity and attractive spread pickup over the benchmark auto and credit card sectors increasingly make them a core holding for ABS investors. HEL bonds demand careful analysis because of an inherent mix of credit, prepayment, and structural risks. This overview of the HEL market evolution over the past decade provides some perspective on the risks and opportunities in the sector. It examines typical loan characteristics, underwriting trends, and the drivers of collateral performance, and discusses typical structural features of HEL ABS transactions and the key risk factors for ABS bondholders.