Product details

The treasurer of Lawson Mardon Group Limited (LMG) was reviewing the company''s current financial structure in light of an innovative financing alternative that had recently become available in Canada. It was his objective to pursue a financial strategy that provided the maximum flexibility to raise funds in all financial markets under the most favourable terms. He had recently begun to investigate the possibility of asset securitization as a way to better utilize the company''s existing asset base. More specifically, a proposal for the ongoing securitization of a portion of LMG''s accounts receivable had been presented by Citibank Canada. Benefits held out in the proposal to LMG included lower financing costs, an improved return on assets and a reduction in leverage.