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Structured Finance: Leveraged Buyouts, Project Finance, Asset Finance and Securitization
Comprehensive coverage of all major structured finance transactions
Structured Finance is a comprehensive introduction to non-recourse financing techniques and asset-based lending. It provides a detailed overview of leveraged buyouts, project finance, asset finance and securitisation.
Through thirteen case studies and more than 500 examples of companies, the book offers an in-depth analysis of the topic. It also provides a historical perspective of these structures, revealing how and why they were initially created. Instruments within each type of transaction are examined in detail, including Credit Default Swaps and Credit Linked Notes. A presentation of the Basel Accords offers the necessary background to understand the regulatory context in which these financings operate.
With this book, readers will be able
Delve into the main structured finance techniques to understand their components, mechanisms and how they compare Understand how structured finance came to be, and why it continues to be successful in the modern markets Learn the characteristics of financial instruments found in various structured transactions Explore the global context of structured finance, including the regulatory framework under which it operates Structured Finance provides foundational knowledge and global perspective to facilitate a comprehensive understanding of this critical aspect of modern finance. It is a must-read for undergraduate and MBA students and finance professionals alike.
Structured Finance is a comprehensive introduction to non-recourse financing techniques and asset-based lending. It provides a detailed overview of leveraged buyouts, project finance, asset finance and securitisation.
Through thirteen case studies and more than 500 examples of companies, the book offers an in-depth analysis of the topic. It also provides a historical perspective of these structures, revealing how and why they were initially created. Instruments within each type of transaction are examined in detail, including Credit Default Swaps and Credit Linked Notes. A presentation of the Basel Accords offers the necessary background to understand the regulatory context in which these financings operate.
With this book, readers will be able
Delve into the main structured finance techniques to understand their components, mechanisms and how they compare Understand how structured finance came to be, and why it continues to be successful in the modern markets Learn the characteristics of financial instruments found in various structured transactions Explore the global context of structured finance, including the regulatory framework under which it operates Structured Finance provides foundational knowledge and global perspective to facilitate a comprehensive understanding of this critical aspect of modern finance. It is a must-read for undergraduate and MBA students and finance professionals alike.
- GenresFinance
376 pages, Kindle Edition
First published January 1, 2021
60 people are currently reading
162 people want to read
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Displaying 1 - 6 of 6 reviews
August 13, 2025
A huge shout out to this book and the author for making me realize that complicated financial concepts can be explained in simple terms with griping real life examples. Would definitely recommend it to someone, like myself, who’s started working in this space, having a bit of understanding of finance but not totally sure of what everything means, or who’s just simply eager to make sense of financial jargons and all the news happening around it
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March 19, 2022a business model that no one understands, even when they pretend they do.
There are intense discussions about all the typical aspects of a retail business: sales, margins, finance, supply chains, and HR.
highly complex transactions designed to optimize the financing of companies, specific projects, and services.
With the rise of structured finance, the banking industry has changed more drastically (for good and ill) during the past four decades than during the previous 300 years. It has transformed banks from dull deposit‐to‐lend conduits with a staid management culture to moneymaking factories led by brash and colorful figures.
Structured finance refers to all loans that are not “vanilla loans”
Structured finance describes transactions in which funding is brought by lenders to a dedicated company (also known as a special purpose vehicle or SPV) created for the sole purpose of financing the acquisition of an asset or a group of assets (financial or physical assets). The repayment of the loan is linked only to the performance of the underlying assets, meaning that it depends on the income generated by the SPV. The lenders take a risk on these assets and have no recourse on the equity holders in the SPV.
The four main financial techniques analyzed in this book are:
1. Leverage buyout (also known as LBO): one of the techniques commonly used to finance the acquisition of companies, especially when the buyer is an investment firm or an individual.
2. Project finance: a tool used to finance large infrastructure or energy projects.
3. Asset finance: the financing of investments in movable assets like aircraft or ships.
4. Securitization: the financing of portfolios of financial assets.
There are many reasons why banks started to promote structured finance solutions to their clients. The first is obviously that structured finance products are lucrative per se. If a bank is able to capture the whole value chain for a single structured finance deal, there are not many areas of finance that can offer the same returns. The example of Michael Milken in the 1980s is striking. At one point, his single structured debt department at Drexel Burnham was earning more profits than any other US investment bank as a whole.
investors can select the product that fits their needs most: senior debt, mezzanine, or equity
A bank can therefore in theory have an infinite debt‐toequity ratio.
banks could prioritize loans with higher margins (hence risky) over safer prospects.
However, if a bank can demonstrate based on its own historical data that the benefit of certain securities is greater than established in the Basel Accords, it can use its own data to calculate RWAs. The use of this method, called the advanced approach, is nonetheless subject to the approval of the local regulator.
the Amsterdam Stock Exchange – created in 1602 originally for dealing with the printed bonds and stocks of the Dutch East India Company.
A BIMBO (buy‐in management buyout) is a mix of the two previous approaches.
Dividends paid by a company to its parent are in many countries taxed at a significantly lower rate than other revenues. They can sometimes even be tax exempt. This is mainly because dividends are paid from the after‐tax profits of a company. In other words, they arise from profits that have already been taxed. It would make little sense to tax profits at the level of a subsidiary and tax them again when they are distributed under the form of dividends to a parent. To avoid a double tax impact, many countries have introduced provisions limiting the taxation of dividends paid by a company
There are intense discussions about all the typical aspects of a retail business: sales, margins, finance, supply chains, and HR.
highly complex transactions designed to optimize the financing of companies, specific projects, and services.
With the rise of structured finance, the banking industry has changed more drastically (for good and ill) during the past four decades than during the previous 300 years. It has transformed banks from dull deposit‐to‐lend conduits with a staid management culture to moneymaking factories led by brash and colorful figures.
Structured finance refers to all loans that are not “vanilla loans”
Structured finance describes transactions in which funding is brought by lenders to a dedicated company (also known as a special purpose vehicle or SPV) created for the sole purpose of financing the acquisition of an asset or a group of assets (financial or physical assets). The repayment of the loan is linked only to the performance of the underlying assets, meaning that it depends on the income generated by the SPV. The lenders take a risk on these assets and have no recourse on the equity holders in the SPV.
The four main financial techniques analyzed in this book are:
1. Leverage buyout (also known as LBO): one of the techniques commonly used to finance the acquisition of companies, especially when the buyer is an investment firm or an individual.
2. Project finance: a tool used to finance large infrastructure or energy projects.
3. Asset finance: the financing of investments in movable assets like aircraft or ships.
4. Securitization: the financing of portfolios of financial assets.
There are many reasons why banks started to promote structured finance solutions to their clients. The first is obviously that structured finance products are lucrative per se. If a bank is able to capture the whole value chain for a single structured finance deal, there are not many areas of finance that can offer the same returns. The example of Michael Milken in the 1980s is striking. At one point, his single structured debt department at Drexel Burnham was earning more profits than any other US investment bank as a whole.
investors can select the product that fits their needs most: senior debt, mezzanine, or equity
A bank can therefore in theory have an infinite debt‐toequity ratio.
banks could prioritize loans with higher margins (hence risky) over safer prospects.
However, if a bank can demonstrate based on its own historical data that the benefit of certain securities is greater than established in the Basel Accords, it can use its own data to calculate RWAs. The use of this method, called the advanced approach, is nonetheless subject to the approval of the local regulator.
the Amsterdam Stock Exchange – created in 1602 originally for dealing with the printed bonds and stocks of the Dutch East India Company.
A BIMBO (buy‐in management buyout) is a mix of the two previous approaches.
Dividends paid by a company to its parent are in many countries taxed at a significantly lower rate than other revenues. They can sometimes even be tax exempt. This is mainly because dividends are paid from the after‐tax profits of a company. In other words, they arise from profits that have already been taxed. It would make little sense to tax profits at the level of a subsidiary and tax them again when they are distributed under the form of dividends to a parent. To avoid a double tax impact, many countries have introduced provisions limiting the taxation of dividends paid by a company
June 28, 2021
Great book, it made for an enjoyable read as Larreur writes with unparalleled clarity based on deep insight and experience. I’ll read whatever he writes next.
February 19, 2022
Clear presentation of concepts. Examples to help fully understand various structures were very helpful.
June 1, 2024
Classic structured finance; LBO, PF ABS
August 18, 2024
It's a textbook. Dry but lucid. Your enjoyment of this book will 100% correlate with your interest in structured finance.
Displaying 1 - 6 of 6 reviews