From Longman Business Dictionaryasset-backed securityˌasset-backed seˈcurity [countable]FINANCE if a financial institution sells asset-backed securities, it buys loans from lenders such as banks and uses the loans as BACKING for bonds. The financial institution takes the repayments on these loans and uses them to pay interest to investors who buy the bonds, and to repay the bonds. Lenders sell their loans in this way in order to improve their financial situation and to make more loans → security
