金融市场与机构Bond Markets推荐.pptVIP

2. Institutional Use of Bond Market A leveraged buyout (or LBO, or highly leveraged transaction (HLT), or bootstrap transaction) occurs when an investor, typically financial sponsor, acquires a controlling interest in a companys equity and where a significant percentage of the purchase price is financed through leverage (borrowing). The assets of the acquired company are used as collateral for the borrowed capital, sometimes with assets of the acquiring company. Typically, leveraged buyout uses a combination of various debt instruments from bank and debt capital markets. The bonds or other paper issued for leveraged buyouts are commonly considered not to be investment grade because of the significant risks involved.1 If the company subsequently defaults on its debts, the LBO transaction will frequently be challenged by creditors or a bankruptcy trustee under a theory of fraudulent transfer2 Companies of all sizes and industries have been the target of leveraged buyout transactions, although because of the importance of debt and the ability of the acquired firm to make regular loan payments after the completion of a leveraged buyout, some features of potential target firms make for more attractive leverage buyout candidates, including: Corporate Bonds Trade Many dealers take positions in trading Individuals use brokers to make trade (market order or limit order) Online trading are increasing recently Corporate Bonds Market Quotation ATT 6 ? 29 7.3 214 88 5/8th +1/4 ATT bond quote for 1/13/02 (U.S. Exchange Bond) 6.5% coupon rate Maturity in 2029 7.3% current yield (annual interest/price) 214 bonds traded on this day Bond priced at close of day 88 5/8th % of face ($1000) or $886.25 Bond price up ? point for the day or $2.50 2. Institutional Use of Bond Market---Exhibit 7.5 F i n a n c i a l I n s t i t u t i o n P a r t i c i p a t i o n i n B o n d M a r k e t s C o m m e r c i a l b a n k s a n d s a v i n g s ? P u r c h a s e b o