ABCP
Definition
Short for Asset-Backed Commercial Paper — a short-term loan/investment instrument that is backed by physical or financial assets like loans or receivables.
Example
Example 1:
A Nigerian bank bundles together a group of customer loans and uses them as backing to raise short-term funds, this instrument is called ABCP, essentially using existing assets to generate fresh capital quickly.
Example:
A large investment firm in New York issues ABCP backed by a pool of car loans and mortgages, allowing them to raise short-term cash from investors while using those assets as security.