It stands for absolute prepayment speed; the monthly prepayment (in relation to an ABS (asset backed security) or a loan or lending arrangement or similar structure/ instrument) that is expressed as a percentage of the original principal amount. It measures the monthly rate of debt prepayments as a percentage of the original pool balance.
It compares actual period prepayments in relation to the whole pool balance. This repayment measure is typically applied to securities backed by debt securities such as auto loans, auto leases, RV loans, among others.
Unlike conditional prepayment rate (CPR), which measures prepayments as a percentage of the current outstanding debt balance, the absolute prepayment rate calculates the same as a monthly percentage of the original debt balance.
It is known as ABS.
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