ECB still accepting Volkswagen's asset-backed securities as collateral

[FRANKFURT] The European Central Bank is still accepting asset-backed securities issued by Volkswagen's leasing arms as collateral, data published on the ECB's website showed on Monday.

Securities issued by Volkswagen's financial subsidiaries, typically ABS backed by car loans, still featured on a list of types of collateral that can be used to borrow from eurozone central banks.

A source told Reuters last week the ECB stopped buying Volkswagen's ABS as part of its asset-purchase programme following the German car maker's diesel emissions scandal.

The ECB applies a discount to the value of the collateral it accepts. This haircut mainly depends on the credit rating of the entity that issued the security posted as collateral.

Volkswagen was placed by Fitch on "rating watch negative" last week, meaning the rating agency is considering downgrading the German car maker.

REUTERS