Leveraged Finance: Concepts, Methods, and Trading of High-Yield Bonds, Loans, and Derivatives (Frank J. Fabozzi Series) [Hardcover]

Stephen J. Antczak (Author), Douglas J. Lucas (Author), Frank J. Fabozzi CFA (Author)

Book Description

Publication Date: July 27, 2009 | ISBN-10: 047050370X | ISBN-13: 978-0470503706 | Edition: 1

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 corporate credit, relative value analysis, and various trading strategies used by investors, such as hedging credit risk with the equity derivatives of a different company. Stephen Antczak, Douglas Lucas, and Frank Fabozzi present readers with real-market examples of how investors can identify investment opportunities and how to express their views on the market or specific companies through trading strategies, and examine various underlying assets including loans, corporate bonds, and much more. They also offer readers an overview of synthetic and structured products such as CDS, LCDS, CDX, LCDX, and CLOs. Leveraged Finance has the information you need to succeed in this evolving financial arena.

Editorial Reviews

Review

"…a resource that will be invaluable to traditional and nontraditional investors long after the market recovers." (The Investment Professional)

From the Inside Flap

The financial crisis that began in 2007 has prompted unprecedented volatility in asset valuations and left many wondering how to overcome its challenges. Given this extreme investment environment, investors need to make decisions that enable an appropriate risk/return profile, and the leveraged finance market can be a very important option in this regard. Nobody understands this area better than the author team of Stephen Antczak, Douglas Lucas, and Frank Fabozzi. And now, with Leveraged Finance, they help both experienced and aspiring market professionals gain a better understanding of today's high-yield corporate debt markets.

Leveraged Finance doesn't attempt to predict the future of markets or the ultimate outcome of this crisis. It was written to put the principles of the leveraged finance market in perspective. With this reliable resource as your guide, you'll quickly become familiar with the tools available in the leveraged finance market, how they are related to assets and investment opportunities in other markets, and how to apply these concepts in the real world.

In the past, the assets within the leveraged finance market fell into one of two categories: cash bonds or cash loans. But times have changed. With the introduction of products such as credit default swaps, synthetic indexes, and index tranches, leveraged finance investors have many tools to work with and assets to consider. This book attempts to tie the various pieces that comprise the leveraged finance market together. Its fourteen chapters are divided into five comprehensive parts:

• Part One covers the cash markets, which include high-yield bonds—also known as speculative-grade or junk bonds—and leveraged loans
• Part Two takes a look into the structured market, focusing on one type of collateralized debt obligation—collateralized loan obligations (CLOs)
• Part Three examines the relatively young synthetic markets, which include credit default swaps (CDS), traded credit indexes, and index tranches
• Part Four reviews trading strategies that investors can employ within the leveraged finance market
• Part Five addresses default correlation—the phenomenon that the likelihood of one obligor defaulting on its debt is affected by whether or not another obligor has defaulted on its debts

Those with the knowledge and skill to participate in the leveraged finance space stand to benefit from the many opportunities that the current environment is creating. Filled with in-depth insights and expert advice, Leveraged Finance will help you identify and take advantage of these opportunities. 

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Product Details

• Hardcover: 368 pages
• Publisher: Wiley; 1 edition (July 27, 2009)
• Language: English
• ISBN-10: 047050370X
• ISBN-13: 978-0470503706
• Product Dimensions: 9.3 x 6.3 x 1.2 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #147,710 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

4.0 out of 5 stars doesn't try to predict the future, October 7, 2009

By 

W Boudville (Terra, Sol 3) - See all my reviews
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This review is from: Leveraged Finance: Concepts, Methods, and Trading of High-Yield Bonds, Loans, and Derivatives (Frank J. Fabozzi Series) (Hardcover)

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.

1 of 2 people found the following review helpful:

5.0 out of 5 stars Authoritative and approachable, July 19, 2010

By 

Gamma "Gamma" (NYC) - See all my reviews

Amazon Verified Purchase

This review is from: Leveraged Finance: Concepts, Methods, and Trading of High-Yield Bonds, Loans, and Derivatives (Frank J. Fabozzi Series) (Hardcover)

As a practitioner, i found this author's approach authoritative and approachable. The subject matter was well organized and fully detailed, yet it was also readable. This is a book that can function as a great intro to Lev Fin for the average or advanced investor.

It's a must read for those interested in Lev Fin, CLO's, and High Yield. Great thoughts and great perspective from some of the greatest minds in this space.