Question

Structed finance

Define structed finance

Answer 1

Structured finance is generally a complex financial instrument (might include derivatives) offered to borrowers with unique and sophisticated needs. The simple loan facility does not work for these clients.

These type of finance options are usually only offered to large borrowers needing a vast injection of capital or another source of income and those who don't want the traditional methods of financing due to the complex nature of their business

.Structured finance products usually include derivatives and securitized and collateralized debt instruments like collateralized mortgage obligations, syndicated loans, mortgage obligations, hybrid securities, collateralized debt obligations (CDOs), credit default swaps (CDSs) and collateralized bond obligations (CBOs).

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