ppt_ch10 Medium- to Longer-term Debt 外汇与外汇市场 教学课件.pptVIP

Chapter 10 Medium- to Longer-term Debt Learning Objectives Identify the types of medium- to long-term debt instruments in the market Understand the securitisation process Pricing of longer-term debt instruments Chapter Organisation 10.1 Introduction 10.2 Term Loans or Fully-drawn Advances 10.3 Mortgage Finance 10.4 Debentures, Unsecured Notes and Subordinated Debt Chapter Organisation (cont.) 10.5 Calculations: Fixed Interest Securities 10.6 Leasing 10.7 Direct Credit Substitutes 10.8 Summary 10.1 Introduction Matching principle Firms should match the maturity structure of their assets with the maturity structure of their sources of funds (liabilities and shareholder funds) Therefore, longer-term assets should be funded with longer-term liabilities and equity The repayment schedule of debt financing for long-term projects should align with the project’s expected future cash flows 10.1 Introduction (cont.) Repayment may be Interest only during term of loan and principal repayment on maturity Amortised loan (credit foncier loan) periodic loan instalments consisting of interest due and reduction of principal Deferred repayment loan loan instalments commence after a specified period related to project cash flows, and the debt is amortised over the remaining term of the loan Chapter Organisation 10.1 Introduction 10.2 Term Loans or Fully-drawn Advances 10.3 Mortgage Finance 10.4 Debentures, Unsecured Notes and Subordinated Debt 10.2 Term Loans or Fully-drawn Advances Fixed-term loan periods generally range from 3 to 15 years Typically used to finance capital expenditure e.g. building, equipment Repayment can be amortised or deferred 10.2 Term Loans or Fully-drawn Advances (cont.) Interest may be fixed or variable, is linked to an indicator rate e.g. BBSW or bank’s prime rate, and is influenced by Credit risk of borrower (risk premium) Term of the loan Repayment schedule 10.2 Term Loans or Fully-drawn Advances (cont.) Other fees inc