Your investment, and how we verify it
The instrument
An asset-backed security (“security” as in: “investible instrument”) typically is a note, similar to a bond, backed by the cash flows from pools of contracts such as equipment leases, power purchase agreements and vendor finance arrangements. Those notes are secured (as in: “collateralized”) by the contracts and the underlying physical assets and are typically insulated from any risk associated with the originator, when issued by a bankruptcy remote special purpose vehicle.
Senior notes, held by ABS investors, are paid first; junior notes, typically held by the originator (the company who signed the contracts with its customers and created the pool) are paid once the senior position is sufficiently covered. The terms of the issuance describe the level of performance that is expected within the pool (the “covenants”). In case the pool performance falls short of the covenants, distributions on the junior notes are reduced or paused until compliance has been restored.
The problem with the traditional approach
Traditionally, investor confidence in an asset pool has relied on one-time due diligence, periodic sample-based testing by auditors (“agreed upon procedures”), and certifications by executive managers. Each provides only a snapshot of past performance and is out of date the moment it is signed. Collateral-integrity failures in recent years have shown what periodic sampling doesn't catch: fabricated or double-pledged collateral surfacing only after losses occur.
What CQR changes
On CQR Invest™, the pool behind your notes is verified continuously:
Source-system data. Performance data flows directly from the originator’s ERP and contract-management systems, as well as from the manufacturer or OEM’s equipment telematics, rather than spreadsheets prepared for reporting.
Immutably recorded. Every data point is committed to CQR Chain™, creating a tamper-evident record linking contracts, payments, and physical assets.
Triangulated. Independent data sources are cross-checked against each other; anomalies and early-warning signals (underutilization, environmental precursors) surface before they become defaults.
Auditor-attestable. CQR AUP™ reporting replaces periodic sampling with continuous attestation a Big Four firm can sign — and the issuer chooses the auditor, so there's no lock-in and no conflict.
What you see as an investor
Continuously updated, aggregated reporting at pool level for all contracts in the pool, including cash-flow and payments against schedule, collateral-verification status and aggregated performance of both the pool of contracts and the physical assets, with a pool-wide analysis generated by our AI model with data triangulation, and a comparison with the covenants as per the AUP (Agreed Upon Procedures).
This visibility is provided without disclosing the originator’s commercially sensitive asset-level data. Investors receive the information needed to assess performance, while originators retain control of their proprietary commercial and technical information.
After issuance, the originator – now in the role of servicer – uses the same early-warning indicators to help identify and address emerging performance issues before they affect the wider pool, supporting the ongoing quality of the securities.
Zero fees for investors on CQR Invest™
CQR Invest® does not charge investors a fee to access or hold securities through the platform. Our fees are paid by the originator, issuer or servicer as part of the securitization process.
Investors may still incur fees charged independently by the processing bank, their private bank, wealth-management platform, financial adviser or other service providers.
Non-mortgage commercial asset-backed securities (ABS)
ABS are a cornerstone of institutional fixed-income portfolios, with around $4 trillion of annual global issuance (listed and unlisted) and ~$1.7 trillion in US listed securities outstanding.
These securities are backed with the cashflows received from services such as energy generation or equipment leasing. The underlying installations and equipment, with predictable value, serve as collateral. That results in relatively low default risk compared with, for instance, mortgage-backed securities, where real-estate price swings can pose a significant risk.
Asset-backed securities are also generally considered a safer investment than private credit and corporate bonds, which are unsecured (i.e. do not have collateral) and fully rely on the issuer’s ability to generate sufficient cashflows from their business in the future. The issuer of non-mortgage asset -backed securities, and hence the securities themselves, are typically a bankruptcy-remote special purpose vehicle and insulated from the originator. For servicing the notes, they rely on the cashflows from a pool of contracts with several businesses and institutions, with collateral on the underlying equipment and installations.
Widely accepted - in need of verification
Historically, non-mortgage ABS have been created for large institutional investors, centered on sizeable portfolios of high-value assets in mature markets. Their reliability rests on well-defined characteristics and well-established reporting standards.
Today, that trust is eroding, revealing the need for more transparent verification. At the same time, many non-US and emerging markets lack the infrastructure that underpins that trust, leaving the ABS market largely inaccessible to issuers with pools in those other markets.
Cathmere’s proof-based verification platform
Cathmere replaces trust with verification through technology. Using AI, IoT and blockchain, the platform provides mathematical proof as it creates immutable links between contracts, payments and physical assets, drawing verified data directly from the source, and submits the data to triangulation and analysis in a continuous quantitative review.
For overseas and emerging markets
For originators with pools of contracted cashflows outside the mainstream markets, Cathmere’s platform bridges the trust gap, enabling originators to structure asset-backed securities that meet the standards of investors in advanced markets.
Cathmere’s platform also enables institutional investors to participate in the refinancing of the trillions of dollars required for decarbonization and climate mitigation projects in emerging markets, such as solar and wind farms, by creating institutional grade investible instruments from the cashflows generated by these projects.
For retail investors
Cathmere has built an investment platform for retail investors and welcomes integration and collaboration with all leading wealth management platforms, which opens the ABS market to accredited retail investors.
For markets with established access to asset-backed securitizations
Integration with manufacturers’ telematics systems provides ongoing operating data for equipment and power generation assets, supporting the verification and refinancing of vendor leases and vendor-financed portfolios.
Recent irregularities in the US ABS market have shown how weak asset verification can compromise even the most mature systems. Cathmere’s architecture makes vulnerabilities such as fraudulent duplication virtually impossible.
Platform & Technology
More information about the platform, and the technology behind the platform can be found on the platform page of Cathmere Inc, the developer and operator of the CQR platform.