FINANCING WITH ASSET-BACKED SECURITIES
A 4-day programme of
Institut Bank-Bank Malaysia
conducted by
Professor Ian Giddy
Stern School of Business, New York University
 

Outline of Topics

  1. Corporate Finance: Asset and Liability Management
    1. Investment Decisions
    2. Financing Decisions
    3. Risk Management Decisions
  2. Asset-Backed Financing

    3. a. Definition of asset securitization
    b. Key features of asset-backed securities
    c. Scope and size of the asset-backed securities market

        1. The U.S. market
        2. The international market
        3. ABS in developing countries
  3. The Use of Asset-Backed Securities in Financing

    4. a. Corporate financing choices
    b. The advantages and disadvantages of asset securitization as a financing technique
    c. Which companies should finance with asset-backed securities?
    d. Who should invest in asset-backed securities?

  4. The Development of the Asset-Backed Securities Technique

    5. a. Evolution of the U.S. asset-backed securities market
    b. The mortgage-backed securities market
    c. Other asset-backed securities: credit cards, auto loans, etc.

      1. Cagamas and the Malaysian asset-backed securities market
  5. Alternative Ways of Structuring Asset Securitization

    6. a. Collateralized bonds
    b. Pass-through securities
    c. Pay-through securities

    d. Examples of each

  6. Implementation of Asset Securitization
    1. Legal Requirements for Asset-Backed Securities
    2. Regulatory Aspects
    3. Tax Aspects
    4. Rating Agency Requirements
  7. Project Financing as a Form of Asset-Based Finance
    1. Non-recourse Structure
    2. Roles of Sponsor and Other Participants
    3. Sources of Funding
    4. Risks and Risk Mitigation
    5. Ongoing Refinancing
  8. Risk Management in ABS
    1. Sources of Risk
    2. Methods for Risk Reduction
    3. Credit Risk
    4. Liquidity Risk
    5. Interest Rate and Currency Risk
    6. Use of Swaps and Other Hedging Instruments
  9. Third-party insurance
    1. (Presentation by ASIA Ltd)
  10. Special Issues Relating to Asset-Backed Securities in Malaysia

    11. a. Government objectives of developing the Malaysian capital market
    b. Role of the Securities Commission

      1. Cagamas and the housing market
    d. Bank Negara considerations
    e. Ministry of Finance considerations; taxation issues
    f. Rating Agency Malaysia requirements
  11. How the Asset Securitization Technique Works

    12. (Illustrated with a hypothetical asset-backed issue in Malaysia)

    a. Characteristics of the assets

      1. Sample Term Sheet
      2. Illustration of a Pass-Through Structure
  12. Structuring an Asset-Backed Issue: A Hands-On Application
  13. Implementation in Malaysia: Some Practical Issues

    14. a. Issuers and investors
    b. How the assets are transferred
    c. Legal status of the structure

      1. Credit risk reduction techniques
    e. Accounting treatment and tax aspects
  14. Conclusion and Summary

Readings

1. Asset-Backed Securities
2. Sources of Value Added From Structuring Asset-Backed Securities to Reduce or Reallocate Risk
3. An Overview of Techniques in Structural Finance
4. Auto Loan Securitization: A Case Study of the U.S. Auto Finance Industry
5. Credit Enhancement
6. Evaluating the Risk of Credit Card-Backed Securities
7. Standard & Poor's Creditreview, International Structured Finance
 

Case Studies

1. Finance Company Berhad
2. Citicorp vs. Sears
3. Resolution Trust Corporation

Ian H. Giddy, Professor of Finance
New York University • Stern School of Business
44 West 4th Street, New York 10012
Tel 212 998-0332 • Fax 212 995-4233 
Go to Giddy's Web Portal • Contact Ian Giddy at ian.giddy@nyu.edu