The Redemption Obligation is a protection feature specifically for investors in Notes.
It is similar to the Buyback Obligation, but it applies to different investment types:
Asset-Backed Securities (ABS): These are typically protected by a Buyback Obligation from the Loan Originator.
Notes: These are protected by a Redemption Obligation from the company that issues the Note.
How it works
The official terms are detailed in the Base Prospectus for each Note.
In simple terms: if a Note becomes non-performing (for example, if its underlying payments are significantly delayed), the issuer is required to redeem (buy back) the Note from you. This redemption happens early, before the Note's original maturity date.