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Unlike most other debt securities, ABS typically repay both principal and interest on a regular basis, reducing the principal outstanding with each payment cycle. Although foreign purchases and sales of U.S. government agency and corporate ABS are included in the monthly TIC transactions data, the periodic repayments of principal associated with foreign holdings of ABS prior to redemption are not reported, because these repayment streams do not pass through the brokers and dealers primarily responsible for reporting securities transactions on the TIC form S. Thus, using the as-reported TIC data on agency and corporate debt transactions without accounting for these repayments will tend to overstate foreign net acquisitions of ABS; i.e., the monthly TIC data will include any new purchases of ABS but not the paydowns. Estimated ABS repayments can be large: for 2005, estimated repayments on long-term agency ABS were nearly $63 billion, while estimated repayments on corporate ABS were nearly $79 billion.
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