The ABS program provides an important alternative funding source to traditional debt and commercial paper borrowing. Securitization is a key component in Chrysler Financial’s funding strategy.
Chrysler Financial has so far mainly issued ABS in the USA and Canada. The major part of ABS issuance takes place in the USA as the most important ABS market world-wide.
Asset Backed Securities are secured or backed by receivables such as vehicle loans and leases. In particular, the securitized receivables include the Chrysler retail consumer loans and dealer loans originated by Chrysler Financial Services.
Each single ABS issue is rated based on the quality of the underlying assets independent of Chrysler’s overall credit rating. The availability of different rating tranches per issue allows the investor to choose a customized risk-return profile.