Leveraged Financial Markets: A Comprehensive Guide to High-Yield Bonds, Loans, and Other High-Yield Instruments / Edition 1

by William Maxwell, Mark Shenkman

Overview

Public companies acquire most of their outside capital from debt fi nancing and, more specifi cally, leveraged finance—an asset class that falls somewhere between traditional fixed income and stocks. While this type of debt fi nancing carries significant risk to both investors and companies, the potential returns make leveraged finance a cornerstone of the modern financial markets.

Leveraged Financial Markets is a gathering of the most astute and informed minds in the business. The powerhouse editorial team of William F. Maxwell and Mark R. Shenkman have handselected contributions from the top practitioners and thinkers working in leveraged finance today.

The result is an authoritative guidebook that provides you with what you need to navigate the highyield market in the integrated global economy. Packed with a wealth of analytical models illustrating the realities of distress probabilities and losses in default, Leveraged Financial Markets gives you all the insight and strategies you need to:

• Use the Sharpe ratio to measure the return versus risk for high-yield debt
• Develop and oversee a portfolio of high-yield bonds
• Value individual high-yield issuances

It also updates you on changes in the high-yield bond market and features in-depth coverage of numerous debt vehicles leveraged in the market today, including collateralized debt obligations (CDOs), credit derivative swaps (CDSs), collateralized loan obligations (CLOs), and leveraged loans.

Leveraged Financial Markets is your blueprint to becoming a virtuoso of this resilient and popular asset class.

Product Details

ISBN-13:	9780071746687
Publisher:	McGraw Hill LLC
Publication date:	06/22/2010
Series:	McGraw-Hill Financial Education Series
Edition description:	Net
Pages:	416
Product dimensions:	6.30(w) x 9.10(h) x 1.50(d)

About the Author

WILLIAM F. MAXWELL is a professor of fi nance. He holds the Rauscher Chair of Financial Investments at the Cox School of Business, Southern Methodist University, and he has held professorships at the University of Arizona, Texas Tech, and Georgetown. Maxwell is the author of numerous articles for academic journals and is the coauthor of High-Yield Bonds. He lives in Dallas, Texas.

MARK R. SHENKMAN is President and Chief Investment Offi cer of Shenkman Capital Management, Inc., one of the world’s largest high-yield money management firms. Shenkman has held major high-yield bond positions since 1977 at First Investors Asset Management, Lehman Brothers, and Fidelity Management and Research. He is also the coauthor of High-Yield Bonds. Shenkman lives in Greenwich, Connecticut.

McGraw-Hill authors represent the leading experts in their fields and are dedicated to improving the lives, careers, and interests of readers worldwide

Table of Contents

Chapter 1 An Overview of Leveraged Finance William F. Maxwell 1

Chapter 2 The Components of the Leveraged Finance Market William F. Maxwell 9

Chapter 3 Understanding the Role of Credit Rating Agencies William F. Maxwell Philip Delbridge 21

Chapter 4 Leveraged Loans as an Asset Class Daniel Toscano 41

Chapter 5 Collateralized Loan Obligations Frederic R. Bernhard, CFA (SCM) John E. Kim (DB) Jonathan A. Savas (SCM) 63

Chapter 6 Differences between CLOs and Structured Finance CDOs Jonathan Blau 97

Chapter 7 Credit Analysis and Analyzing a High-Yield Issuance Amy Levine, CFA Nicholas Sarchese, CFA 113

Chapter 8 Bond Indentures and Bond Characteristics William J. Whelan, III 171

Chapter 9 Credit Models for Assessing Firm Risk William F. Maxwell Philip Delbridge 197

Chapter 10 Performance of Credit Metrics William F. Maxwell Philip Delbridge 213

Chapter 11 Principles of Managing High-Yield Assets Mark R. Shenkman 229

Chapter 12 The Pitfalls of Managing High-Yield Assets Mark R. Shenkman 251

Chapter 13 Performance Analysis Frederic R. Bernhard, CFA (SCM) 259

Chapter 14 Trading in the High-Yield Market Neil Yaris Jason Hodes 277

Chapter 15 CDS: A Primer on Single Name Instruments and Strategies Sivan Mahadevan Morgan Stanley Peter Polansky Morgan Stanley 299

Chapter 16 Leveraged Loan CDSs Vishwanath Tirupattu Sivan Mahadevan Peter Polansky Morgan Stanley 329

Chapter 17 Debtor-in-Possession Financing William F. Maxwell Philip Delbridge 355

Chapter 18 Distressed Investing David J. Breazzano 365

Glossary of Key Terms 393

Notes 397

Bibliography 405

Index 411