Verizon creates news ABS asset class

Jun 2015: Verizon has securitised around $1.6 billion of its broadband (wireless) receivables (equipment instalment plans) relating to phone contracts - creating a new ABS class.

It has already packaged up and sold these types of receivables but these sales were direct to banks instead of a public ABS offer.

Commentators suggested the deal will generate cashflow to relieve working capital pressure for more cash to fund replacing phones under customer contracts where the customer pays for a phone over time rather than in total upfront. More details here and here

Sprint (a US mobile phone network provider with around 55m customers) securitised its "wireless service accounts receivable" [assumed to be payments by customers for either mobile phone purchases and/or using mobile networks] in 2014. The receivables were sold into a group of banks thathad provided a $1,3bn financing facility to Sprint which incorporated a year revolving period. Details here