Subject category:
Finance, Accounting and Control
Published by:
IBS Case Development Center
Length: 6 pages
Data source: Published sources
Topics:
Italian corporate bonds; The Cirio Group; Investment grade bonds; Non-rated bond issues; Restructuring; Parmalat; Raimondi - Lettieri motion; Bankruptcy; Special purpose vehicles; Finmatica SPA; Convertible bonds; Liquidity; Collateral debt obligation; Italian industrial and financial system; The Bretton Woods system
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Abstract
In the late 1990s, when Italy was preparing to abandon its volatile lira for the more solid euro, many Italian companies reduced bank financing and increased debenture financing, while at the same time investors seeking higher yields switched from short-term government notes to unrated corporate bonds. A number of well-known names, including the fashion house Versace, had bonds becoming due in 2004. The case elucidates the evolution and transformation of the Italian capital markets and also how the corporate bonds, which were bella figura, turned into buconero. The case also helps the reader to understand how the lack of corporate governance led to the befooling of Italian retail investors.
Location:
Other setting(s):
2004
About
Abstract
In the late 1990s, when Italy was preparing to abandon its volatile lira for the more solid euro, many Italian companies reduced bank financing and increased debenture financing, while at the same time investors seeking higher yields switched from short-term government notes to unrated corporate bonds. A number of well-known names, including the fashion house Versace, had bonds becoming due in 2004. The case elucidates the evolution and transformation of the Italian capital markets and also how the corporate bonds, which were bella figura, turned into buconero. The case also helps the reader to understand how the lack of corporate governance led to the befooling of Italian retail investors.
Settings
Location:
Other setting(s):
2004