Product Description
A timely guide to today’s high-yield corporate debt markets Leveraged Finance is a comprehensive guide to the instruments and markets that finance much of corporate America. Presented in five sections, this experienced author team covers topics ranging from the basics of bonds and loans to more advanced topics such as valuing CDs, default correlations among CLOs, and hedging strategies across corporate capital structures. Additional topics covered include basic co… More >>
Leveraged Finance: Concepts, Methods, and Trading of High-Yield Bonds, Loans, and Derivatives
The book was written in early 2009, just as the market was plumbing new multiyear lows. Perhaps because of this, the authors are careful not to offer any predictions as to the future. Instead the book is timely, in that it explains CLOs and CDSs to a reader unacquainted with them.
We are reminded that CLOs have been around 20 years, which includes the 90-1 and 2001 recessions. These were not generally implicated as causes of those events. But CLOs and their sisters, the CDSs, were common funding events in recent years. The text describes how these were typically made out of simpler financial constructs.
Unsurprisingly considering when the book was written, there is an extensive discussion about the default rates. Of course these are historical, and the reader should appreciate that the severity of the current recession might well yield higher defaults.
Generally the maths is kept at a necessary minimum; just enough to illustrate the concepts.
Rating: 4 / 5