The document discusses bond valuation and risk, including:
1) The relationship between bond price and yield, where higher yields cause lower prices. Convexity measures the curvature of this relationship.
2) Duration measures how sensitive a bond's price is to interest rate changes. Longer duration bonds have greater price volatility.
3) Convexity provides additional protection for bond prices against interest rate changes beyond what duration captures.
The document discusses different types of international corporate bonds and international bonds. It describes term bonds and serial bonds as common types of corporate bonds. It also discusses secured bonds such as collateral trust bonds that are backed by financial assets, and unsecured debentures and guaranteed bonds. The document then explains foreign bonds issued locally by foreign entities, and global bonds and eurobonds issued internationally in different currencies. Eurobonds offer advantages like minimum regulation, no withholding tax, and speed of issuance underwritten by large international banks.
This document discusses credit analysis and financial distress prediction. It covers key topics including why firms use debt financing, potential downsides of debt financing, and differences in debt financing practices internationally. It also describes the credit analysis process in private debt markets, including conducting financial analysis and assembling loan structures. Methods of predicting financial distress like Altman's Z-score model are also discussed.
The document discusses key concepts for forecasting future firm performance, including:
1) Forecasts should be comprehensive and include condensed financial statements, starting from past performance trends of sales, earnings, and return on equity.
2) Key drivers like technology and alliances are used to derive forecasted financial statements, starting with estimated sales.
3) Past ratios like return on equity and earnings can provide insights but may mean-revert over time.
4) The document provides an example forecast for Loewe, assuming sales growth from innovations but mean-reversion of returns and increasing leverage over time.
Chapter 5 discusses two primary tools for financial analysis: ratio analysis and cash flow analysis. Ratio analysis assesses how financial statement line items relate and measures performance relative to benchmarks. Cash flow analysis evaluates liquidity and cash flows from operating, investing, and financing activities. The chapter analyzes ratios such as ROE, profit margins, and leverage ratios to evaluate the profitability and growth of Bang & Olufsen and Loewe. It also examines cash flows from operating, investing, and financing activities to assess internal cash generation and financing needs.
Recasting financial statements into a standardized template makes analysis more meaningful by increasing comparability. Analyzing elements of the balance sheet allows understanding of economic substance beyond legal form. Distortions in assets and liabilities can arise from ambiguities in ownership, future benefits, and fair values, and can result in overstating or understating accounts to misrepresent financial position. Common forms of overstated and understated assets and liabilities are described.
The document provides an overview of key concepts in accounting analysis. It discusses factors that influence the quality of financial reports, international financial reporting standards, external auditing requirements, and public enforcement of standards. It also outlines six steps for performing accounting analysis: 1) identify principal accounting policies, 2) assess accounting flexibility, 3) evaluate accounting strategy, 4) evaluate disclosure quality, 5) identify potential red flags, and 6) undo accounting distortions. Throughout, it emphasizes the importance of understanding a company's accounting choices and incentives to effectively analyze its financial information.
This document summarizes key concepts from Chapter 2 on strategy analysis. It discusses the importance of analyzing a firm's strategy to understand risks, profitability, and competitive advantages. It also covers Porter's five forces framework for industry analysis, competitive and corporate strategy analysis. Specific examples analyze the European airline industry and IKEA's strategy of low-cost differentiation.
Financial statements provide important information to capital markets and business analysts for evaluating investment opportunities and company performance. They summarize the economic consequences of a company's activities according to accounting standards and are used by intermediaries to analyze business strategy, accounting, finances, and prospects. This chapter outlines a framework for using financial statements to accomplish these analyses and make well-informed decisions.
22. 优先 / 次级 优先级 Senior class ( 优先级利益 Senior interest or Senior percentage = 92.25%) $92.25 mil 次级 Sub class $7.75 mil (subordinate interest or subordinate percentage = 7.75% $100 mil The sub class absorbs all losses up to $7.75 mil. Prepayment will reduce its protection for senior class, hence add-in structure uses shifting interest (see next page)
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24. 变动利益 Shifting Interest Question: why the shifting interest percentage reduces over time? Year of after issuance Shifting interest percentage 1-5 100 6 70 7 60 8 40 9 20 After 9 yeas 0
27. 抵押担保债券 (Collateralized Mortgage Obligations) MBS A B C D A A A B B B C C C D D D P+I I I I P+I I I I P+I P+I 顺序支付结构
28. 抵押担保债券 (Collateralized Mortgage Obligations) MBS A B C Z A Z B C C C P+I I -P I P+I I -P -P P+I P+I 顺序支付结构 + 零息部分 B A Z A B Z
29. 抵押担保债券 (Collateralized Mortgage Obligations) MBS A B C － F Z A Z B C P+I I -P I P+I I -P -P P+I P+I 顺序支付结构 + 零息部分＋浮动＋反向浮动 B A Z A B Z C － IF C － F C － IF C － F C － IF
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32. 抵押担保债券 (Collateralized Mortgage Obligations) MBS PO IO P I 利息 (interest only) ＋本金 (principal only)
