Module
Description
Asset-backed securities
constitute a growing segment of the global capital markets and have
become widely employed in developing as well as developed countries.
The asset securitization technique, while complex,
has won a secure place in corporate financing and investment portfolios
because it can, paradoxically, offer originators a cheaper source of
funding
and investors a superior return. Not only does securitization transform
illiquid assets into tradeable securities, but it also manages to
transform
risk by means of the separation of good financial assets from a company
or financial institution with little loss of revenue. The assets, once
separated from the originator, are employed as backing for high-quality
securities designed to appeal to investors.
This module asks why
and when corporations and financial institutions
should issue asset-backed securities, and which kind of such
instruments
make sense to investors. In two sessions, we offer an economic
cost-benefit analysis of
the technique, an insight into the legal, accounting, tax and
regulatory
principles, the risks and how they can be managed, and a roadmap for
choosing
this technique over others in today's capital market.
Questions to
be addressed include:
- What are the key structural and
legal
issues, and what
are the gray areas?
- What are issuers' concerns, and
what are
the strengtrhs
and weaknesses of ABS relative to alternative funding sources?
- What drives ABS ratings? Why does
ABS
credit quality
differ fundamentally from that of corporate bonds?
- Servicing contracts -- how do they
work?
What are the
rewards and risks?
- How can one evaluate different
collateralized debt
obligations (CDOs)?
- Synthetic ABS: How do they really
work, and
what are
their strengths and shortcomings?
- What is whole business
securitization? How
do banks
implement this and other forms of "corporate cash flow financing?"
Instructor
Ian Giddy
is on the faculty of finance at New York University, USA. He has taught
finance at NYU, Columbia,
Wharton, Chicago and abroad for the past twenty-two years. He was
Director
of International Fixed Income Research at Drexel Burnham Lambert from
1986
to 1989. The author of more than fifty articles on international
finance,
Dr Giddy has served at the International Monetary Fund and the U.S.
Treasury
and has been a consultant with numerous financial institutions and
corporations
in Europe, the U.S. and Asia. He is the author or co-author of The
International
Money Market, The Handbook of International Finance, Cases
in International Finance, Global Financial Markets Asset
Securitization in Asia, and The
Hudson River Watertrail Guide.
Schedule
| Date |
Topics |
Friday
May 20
Morning
|
|
Friday
May 20
Afternoon
|
|
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