From the Collaborative Bond and Money Market Data Portal
Funding Agreement-Backed Notes (FABNs) are a type of securitised debt instrument issued by a special purpose vehicle (SPV) or trust. These notes are backed primarily by funding agreements, which are deposit-type contracts issued by insurance companies. The funding agreements serve as the underlying asset and source of payment for the notes. The notes generally have terms (rate, maturity, principal) that match those of the funding agreements, and investors rely on the insurer’s obligation to honor these agreements for payment. FABNs offer liquidity by converting long-term, illiquid funding agreements into shorter-term, marketable securities
