An innovative acquisition financing structure means purchasers no longer need to rely on limited short-term bank funding. It also helps the lending banks avoid refinancing risk.

First seen in the recent HSBC Rail transaction, the accelerated structured bond offering (Asbo) sees vendor and purchaser working together to develop a financing structure before the sale and purchase agreement (SPA) is signed.

Instead of providing short-term funding and then refinancing it through a bond sale, the new structure jumps straight to the capital markets. This stops banks having to tie up valuable short-term capital, and avoids expensive swaps on a floating-rate...