A chattel is a type of personal property that is not real estate. This includes things like furniture, cars, and appliances. In the context of securitisation, chattels can be used to secure loans. For example, a bank might lend money to someone to buy a car, and the car would act as collateral for the loan. If the borrower defaults on the loan, the bank could repossess the car.
Chattels can be securitised in the same way that other assets can be securitised. This means that they can be pooled together to create a securitised product, such as a car loan ABS or equipment loan ABS. Investors in these products would receive regular payments from the borrowers, and if a borrower defaults on their loan, the investors would have a claim on the chattels that were used to secure the loan.
Here are some examples of chattels that can be securitised:
- Cars
- Boats
- Furniture
- Appliances
- Equipment
- Aircraft
- Shipping containers