Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 20 December 1994
Length: 12 pages
Data source: Field research
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Abstract
In early 1992, Lehman Brothers had received a mandate from its affiliate, American Express Travel Related Services (TRS) Co, to securitize a portion of its consumer charge-card receivables portfolio. It is now July 22, and Lehman and TRS have just returned from a 'road show' that was undertaken to convince prospective investors of the merits of these new securities. Lehman must now price the securities. Because this is the first-ever securitization of charge-card receivables, there are no directly comparable benchmarks that can help in pricing. However, the securities share common features with credit-card receivables backed securities, which by now are well accepted. Another comparable is non-callable finance company debt. This deal is being watched closely by competing underwriters, investors, and senior management at TRS and Lehman. 'Success' could catapult Lehman into becoming a major player in the asset-backed market whereas 'failure' would be a major setback.
Location:
Other setting(s):
1992
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 9 pages
Spanish language
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 20 December 1994
Revision date: 29-Jan-2020
Length: 12 pages
Data source: Field research
About
Abstract
In early 1992, Lehman Brothers had received a mandate from its affiliate, American Express Travel Related Services (TRS) Co, to securitize a portion of its consumer charge-card receivables portfolio. It is now July 22, and Lehman and TRS have just returned from a 'road show' that was undertaken to convince prospective investors of the merits of these new securities. Lehman must now price the securities. Because this is the first-ever securitization of charge-card receivables, there are no directly comparable benchmarks that can help in pricing. However, the securities share common features with credit-card receivables backed securities, which by now are well accepted. Another comparable is non-callable finance company debt. This deal is being watched closely by competing underwriters, investors, and senior management at TRS and Lehman. 'Success' could catapult Lehman into becoming a major player in the asset-backed market whereas 'failure' would be a major setback.
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Location:
Other setting(s):
1992
Related
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Length: 9 pages
Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 20 December 1994
Revision date: 29-Jan-2020
Length: 12 pages
Data source: Field research