Credit Derivatives and Synthetic Structures: A Guide to Instruments and Applications (Tavakoli Finance)

Tavakoli, Janet M.

ISBN 10: 1943543143 / ISBN 13: 9781943543144

Published by Lyons McNamara LLC, 2019

About this Item

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Bibliographic Details

• Title: Credit Derivatives and Synthetic Structures: A Guide to Instruments and Applications (Tavakoli Finance)
• Publisher: Lyons McNamara LLC
• Publication Date: 2019
• Language: English
• ISBN 10: 1943543143
• ISBN 13: 9781943543144
• Binding: paperback
• Condition: Good

About this title

Synopsis

There is a newer edition of this book: Credit Derivatives and Securitization 3rd Edition (2022).

The Original Credit Derivatives Bible

A comprehensive first look at the initial explosion of the credit derivatives market as growing investments and risk management mechanisms. This is the paperback edition of credit derivatives expert Janet Tavakoli’s finance classic, Credit Derivatives and Synthetic Structures, Second Edition (Wiley, 2001). Tavakoli’s iconic book is referenced by law firms, Congress, and scholarly publications. Tavakoli explains what works, and more importantly, what does not work. She provides a guide on how to manage and control the various risks using real world examples based on her extensive experience. This book is the only source that explains the various ways these instruments can be mishandled, and together with her book, Structured Finance and Collateralized Debt Obligations, she noted the flaws in debt obligations leveraged with credit derivatives and their egregious misratings.

Credit derivatives revolutionized the financial industry and changed the way banks, institutional investors, and securities traders do business both domestically and globally. Credit derivatives expert Janet Tavakoli explains how these instruments were developed, their relative value, and their tricks and traps.

Credit derivatives create opportunities, but they are riddled with pitfalls. Tavakoli explains what works, and more importantly, what does not work. She provides a guide on how to manage and control the various risks using real world examples based on her extensive experience.

Tavakoli describes a wide range of products and valuation techniques that are particularly important in the current market as well as how to manage risks for the essential instruments:

* Language issues for confirmations and term sheets and how to fix them.

* Information Asymmetry and what to do about it

* Total Rate of Return Swaps (TRORS)-receiver and payer motivation, mismatched maturities, balance sheet management, loan TRORS mechanics

* Credit default swaps and options-basis risk, materiality, price adjustments, termination payments, normalized price method, pricing and applications

* Exotic structures

*Asset swap switches

* Synthetic lending facilities

* Prorata default structures

* Basket default swaps

* Basket default options

* Currency convertibility

* Sovereign Credit Default Swaps

* Credit Linked Notes (CLNs)-reasons for CLNs, black box structures, collateralized loan obligations, hybrid securitizations

* Sovereign risk and emerging markets-tax arbitrage, cross border issues, special event risks, pricing convertibility protection

And much more.