The impact of prepayment on LCDX Index
Date Issued
2009
Date
2009
Author(s)
Wu, Tse-Ju
Abstract
Leveraged buyout has been well-known since the booming M&A deals in 1980’s. On the other hand, since 1990’s development of financial innovation, we have also witnessed the booming credit derivative market, and the products in this market could be in any possible forms since they are engineered to meet different demands. Recently in the early 21st century, the so-called financial derivative markets including equity derivative, currency derivative, interest rate derivative and the most popular and innovative credit derivative have evolved to a certain standardized platform and what’s more, the standardized concept with the large scale of financial innovation. Products in these markets have their own individual functions with a consistency.yndicated secured loans or the leveraged loans have all been an important target underlying assets or reference entities with the booming of private equity funds. They have to measure the funding cost by trading the corresponding credit derivative and even by modeling some random factors into its price. In this thesis study, my purpose is to understand how leveraged loans are related to the synthetic credit derivatives and how they work.
Subjects
LCDS
LBO
M&A
prepayment risk
counterparty
Type
thesis
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