has changed each month as the principal pays down. Note the principal payments vary considerably due to prepayments but the monthly inter- est payments decline each month as expected. Short-TermMortgage-BackedSecurities     THEGLOBALMONEYMARKETS     Short-TermAsset-Backed Securities hile residential mortgage loans are by far the most commonly secu- ritized asset type, securities backed by other assets (consumer and business loans and receivables) have also been securitized. In this chap- ter we discuss the various asset-backed securities products. Just as with collateralized mortgage obligations (CMOs), structures with multiple tranches can be created from a pool of loans or receiv- ables to create short-term average life tranches. Floating-rate asset- backed securities are typically created where the underlying pool of loans or receivables pay a floating rate. The most common are securities backed by credit card receivables, home equity line of credit receivables, closed-end home equity loans with an adjustable rate, student loans, Small Business Administration loans, and trade receivables. As demon- strated in the previous chapter, fixed-rate loans also can be used to cre- ate a structure that has one or more floating-rate tranches. For example, there are closed-end home equity loans with a fixed rate that can be pooled to create a structure with one or more floating-rate tranches.       CREDIT RISK   Asset-backed securities (ABS) expose investors to credit risk. The three nationally recognized statistical rating organizations rate asset-backed securities. In analyzing credit risk, all three rating companies focus on similar areas of analysis: (1) credit quality of the collateral, (2) the qual- ity of the seller/servicer, (3) cash flow stress and payment structure, and (4) legal structure.   187