Leverage was present both within the structure of the CDO and within the capital structure of many of the buyers.
What is genuinely new in all this is not so much the idea of bundling risks, but the idea that transferring them changes the firm's structure and cost of capital.
Among the changes that could be made: streamlining of banks' regulatory structure, the implementation of capital requirements and increased powers for the Federal Reserve.
In terms of capital structure, equity REITs with lower leverage that are less dependent on capital markets for growth or refinancing of capital should be relatively better-positioned to expand balance sheets and weather economic and financial volatility.
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In a volatile atmosphere like the present you should think of capital structure as a variable that can greatly influence the success or failure of a business enterprise.
Here's an actual example of how changing a capital structure can increase the value of a business.
By taking on additional leverage in an LBO, a PE fund could unleash value and make the capital structure of the company they take private more efficient.
Another factor is the structure of China's capital markets.
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In the typical capital structure of a venture-backed company, the investors have bought preferred stock, which entitles them to get their money back before proceeds are shared with the management team and other holders of common shares and options.
If there is going to be a preferential rate for capital gains, people are going to try to structure as much of their income to take the form of capital gain as possible.
Knight Ridder (nyse: KRI - news - people ) is more vulnerable to a hostile takeover than most media ventures in this age of industry consolidation because of its unique capital structure.
Yes, is the conclusion of stock analysts after the telecom software firm said it was undergoing a "strategic review of its corporate and capital structure" during a disappointing quarterly profit announcement late Thursday.
Encourage instead the issuance of securities that automatically adjust capital structure when financial distress becomes relevant, such as cocobonds with a market trigger.
This latest reduction will leave the capital structure with an implied equity cushion of 50%, sources said.
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The Ssangyong group has pursued an all-out effort to improve Ssangyong Motor's financial structure through a capital-stock increase and the disposal of property.
For instance, if the company looks to raise capital in debt or equity markets in the future, the new structure would allow investors to derive different growth and cost of capital assumptions leading to a higher combined valuation.
With 17 miles of corridors it was easily the biggest office building in the world, and yet the five-story structure was barely visible from the capital on the other side of the Potomac River.
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The SEC and the Financial Industry Regulatory Authority must also create a regulatory structure allowing companies to "crowdfund, " or raise capital from hundreds of investors.
But that will depend on future capital charges for cleared and uncleared assets and the precise structure of trading venues, which are still not known.
And if that were not bad enough, they copied it incompetently, failing to charge the full price of power, or to set up an orderly regulatory structure, or to develop capital markets to fund new investment.
By November 2007, Mr. Taylor was an equity-derivatives trader on Goldman's Capital Structure Franchise Trading desk and had lost a "significant portion" of the trading profits he had accumulated earlier that year, according to criminal charging documents filed by prosecutors Wednesday.
" Found on page six, "DoD will manage the force in ways that protect its ability to regenerate capabilities that might be needed to meet future, unforeseen demands, maintaining intellectual capital and rank structure that could be called upon to expand key elements of the force.
Of the four, Amgen was willing to help Tularik straighten out its capital structure by buying out a major investor who had lost interest, notes the Deloitte report.
Years of narrow gross margins and perhaps a bloated overhead structure had placed MusclePharm in a perilous working capital position.
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Liberty Media this morning announced that it has decided to eliminate its tracking stock structure and will convert each share of Liberty Starz common stock into 0.88129 shares of Liberty Capital.
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Although he accepts some of the theories' limitations, he argues that the professors built the structure for today's capital markets.
Because the Co-Op would become so large in the sensitive business of taking deposits, with care of tens of billions of pounds of savings for many millions of customers, it would be forced to change its corporate structure and governance, and dedicate more capital to banking, to protect depositors from losses.
The deal has a similar structure to that of a pending deal Nationstar announced last month to acquire a significantly larger MSR portfolio from Residential Capital, the mortgage subsidiary of Ally that filed for Chapter 11 bankruptcy May 14.
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But XTO, with a smaller capital structure than the supermajors', is happy to invest in the neglected fields, using new techniques of 3-D imaging, horizontal drilling and so-called fracture stimulation--blowing open rock formations by injecting mudlike fluids down wells to get at big methane reservoirs.
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