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Flexible Capital Structure

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Flexible Capital Structure
Spotlight on Structured Asset-backed Finance

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Spotlight on Structured Asset-backed Finance
Vasgen Edwards, Lloyds Bank Wholesale Banking & Markets - 15 Sep 2009
Corporate treasurers are waking up to the fact that the solution to their flexible funding requirements may be closer to home than they realised. Harnessing the power of the assets hidden on their own balance sheets can be the answer to their financing requirements.

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Increasing changes in the funding landscape mean treasurers are searching for additional prudent and sustainable funding sources, to add to their current funding mix. This is leading to a renewed interest in structured asset-backed financing solutions, designed to give treasurers the opportunity to rebalance and re-engineer their capital structures by offering well-priced, longer maturity alternatives. By securing a funding solution on the assets already owned by the company, or assets that will be essential to the business, it is possible to rebalance pricing models in a company’s favour, as these solutions allow treasurers to ‘pick and choose’ products most suited to their needs and the individual assets they have available. With deal sizes typically ranging from between £25m to £100m, these financing solutions have become a much more attractive option, giving companies the ability to unlock the value of their business’ fixed assets; obtaining assets for short- or long-term contracts and secure new assets with minimal outlay to preserve cash reserves. It is also often possible to secure these financing solutions much more quickly than other methods, by using an existing

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