Frequently Asked Questions
Structured finance is a facility that helps companies understand complex financing needs that cannot be met by conventional financing. Collateralized debt obligations (CDOs), synthetic financial instruments, collateralized bond obligations (CBOs) and syndicated loans are a few examples of structured finance types.
It is important to note that traditional lenders do not offer structured financing.
Structured financing and securitization are increasingly being used by governments, corporations, financial intermediaries for below purposes:
- Better risk management
- Develop financial markets
- Almost always non-transferable
- Expand business reach
- Design new funding tools for advancing, evolving and complicated emerging markets
- Transforms cash flows
- Reshapes the liquidity of financial portfolios
Examples of Structured Finance
- CDOs
- CBOs
- Collateralized mortgage obligations (CMOs)
- Credit default swaps (CDSs)
- Hybrid securities
- Combining elements of debt and equity securities