金融中介與資本市場課件：CH19 Markets for Corporate Senior Instruments I

1、Markets for Corporate Senior Instruments: IChapter 19Corporate Senior InstrumentsFinancial obligations that have priority over common stock in the case of bankruptcyIncludes debt obligations and preferred stockCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2Corporate Senior Instru

2、mentsTypesCommercial PaperMedium Term NotesBank LoansLeasesCorporate BondsPreferred StockCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall3Credit RiskDebt obligations of the US government are presumed to be credit risk free (“AAA”)All other debt obligations have credit risk (a.k.a.

3、default risk)Credit risk is the risk the borrower will default on its obligations to the lender i.e. be unable to pay interest and or principalCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall4Credit RiskCredit spreadAdditional yield over similar maturity government obligations to c

4、ompensate for credit riskCredit rating companiesEvaluate the credit risk of public debt issuersStandard & Poors, Moodys, FitchAssign a rating to each debt issue of the borrowerMarkets have historically relied heavily on ratings to price debtCopyright 2010 Pearson Education, Inc. Publishing as Prenti

5、ce Hall5Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall6Other RisksCredit Spread RiskRisk that value of debt obligation will decline due to an increase in the credit spreadDowngrade RiskRisk that value of debt obligation will decline because credit quality of issuer declines and t

6、he debt is downgradedCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall7Commercial PaperShort-term unsecured promissory note issued in the money marketAlternative to bank borrowing for highly rated companiesCharacteristicsMaturity typically less than 90 daysRolled over at maturityBac

7、ked by unused bank credit linesLimited secondary market activityCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall8Commercial Paper Ratings Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall9Issuers of Commercial PaperLarge corporations with strong credit qualityFinan

8、cial CompaniesCaptive finance companiesBank-related finance companiesIndependent finance companiesNonfinancial CompaniesDomestic and foreign corporationsInvestors in Commercial PaperLarger market than US Treasury bill marketMainly institutional investors seeking higher yield than TreasuriesPurchases

9、 in minimum amounts of $100,000 and multiples thereofInvestors typically hold to maturity because they can get any maturity they wantCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall10Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall11Placement of Commercial PaperDi

10、rect PaperDirectly placed by issuing firm to investorsMost often a finance company with own sales forceDealer-Placed PaperRequires service of an agent (investment or commercial bank) to sell the issuers paperBest efforts underwritingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall1

11、2Non-U.S. Commercial Paper MarketEurocommercial Paper Issued and placed outside the country in whose currency it is denominatedDifferences between U.S. and Euro CPEuro CP has longer maturitiesPossible to issue Euro CP without bank credit linesEuro CP always dealer placedMore active secondary market

12、for Euro CPCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall13Medium-Term Notes (MTN)Corporate debt offered on continuous basisCharacteristicsOffered continuously to investorsRated by rating agenciesMaturities range from 9 months to 10 yearsRegistered with the SECTypically issued by

13、 non-financial corporationsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall14The Primary Market of MTNsPlacement and DistributionMTN program filed as “shelf registration”Issuers posts rates as a spread over TreasuriesNotes sold on a best-efforts basis by an investment bankerTypical

14、ly sold in small amounts versus bonds which are large offeringsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall15Offering Schedule Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall16Structured MTNsDebt plus embedded derivative component Structure is capable of crea

15、ting more complex risk/return profile Types:Inverse floating-rate securityStructured noteEuro MTNsIssued in Euro marketVariety of different issuers (sovereigns, non-financial and financial corporations)Variety of different currenciesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall1

16、7Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall18Syndicated Bank LoansA group of banks provides funds to the borrowerDiversify lenders riskDiversify borrowers riskSenior bank loansMarketableSometimes collateralizedInterest rate based on LIBORSyndicated Bank LoansLIBOR London Inte

17、rbank Offered RateInterest rate banks charge one another for loans in the Euro-market Also benchmark interest rate for large non-bank borrowers (LIBOR + credit spread)Floating interest rateVarious fixed periods; 1mth, 3 mth, 6 mth, 1 yr, etc.Copyright 2010 Pearson Education, Inc. Publishing as Prent

18、ice Hall19Syndicated Bank LoansAssignmentsSelling bank (“assignor”) transfers all rights of ownership to the purchasing bank (“assignee”) Assignee has privity of contract with the borrowerCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall20Syndicated Bank LoansParticipationsUnlike as

19、signment, a participating bank does not have privity of contract with the borrowerRelationship with the seller of the participation not the borrowerCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall21Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall22Lease FinancingM

20、any assets that can be purchased with borrowed funds can also be leasedParties involved:LesseeLessorLeasing arrangementsLeveraged leaseTax-oriented leaseSingle-investor or direct leaseLeasingPotential equipment user (“l(fā)essee”) selects equipment from manufacturerLessee agrees on price with manufacturerBank or finance company (“l(fā)essor”) buys equipmentLease agreement signed by lessee and lessorIn exchange for a promised series of cash flowss for a fixed term, the lessor grants the lessee the right to use the equipmentLessee