Here’s a Bond Backed by Dirty Laundry
Another esoteric deal to hit the market
It’s laundry (investor) day.
Photographer: Daniel Acker/BloombergThis article is for subscribers only.
Coming soon to markets: a bond deal backed by … dirty laundry?
The $400 million of asset-backed securities (ABS) from Alliance Laundry Systems is the latest example of wacky assets being bundled into bonds that are then put up for sale to yield-hungry investors. According to a ratings report from Standard & Poor’s, the bond’s payments ultimately depend on people’s dirty laundry, or at least on their washing it. The deal is backed by a pool of equipment loans used to finance the purchase of washing machines.