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...