Structured finance is a specialized sector of finance that focuses on managing leverage and risk through various financial instruments and strategies. It has gained prominence since the mid-1980s, incorporating products such as Collateralized Debt Obligations (CDOs), Collateralized Bond Obligations (CBOs), and syndicated loans.
Structured finance utilizes securitization to pool assets, creating novel financial instruments to enable better use of available capital or serve as a cheaper source of funding, especially for lower-rated originators.
It involves the repackaging of cash flows from various assets to create new financial products that can better match the risk, return, and liquidity needs of investors and borrowers. This is particularly useful for large corporations with complex financing needs that traditional lending instruments cannot satisfy.

Securitization: A core component of structured finance is securitization, which allows financial institutions to pool assets (like mortgages or loans) into securities that can be sold to investors. This process transforms illiquid assets into liquid securities, facilitating capital flow in the economy.

Tranching: Structured finance often employs tranching, where different classes of securities are created from the same pool of assets. Each tranche has distinct risk profiles and payment priorities, allowing investors to choose based on their risk tolerance.  It is an important concept, because this system used to create different investment classes for the securities. Tranching allows the cash flow from the underlying asset to be diverted to various investor groups.

 Our structured finance services are designed for businesses seeking customized funding through instruments like securitization, mezzanine financing, convertible debt, and hybrid capital structures