Issuers of securitization backed by whole-business cashflows are upping their reliance on variable-funding notes according to an article written and published by Asset-Back Alert. The article mentions companies recently turning to VFNs for benefits including quick execution and lower transaction costs.
Finance partners Patricia Lynch and Christopher Poggi share their insights and experience working with VFNs.
“They are sensitive to changes in interest rates, so there’s potential for issuers to lower debt-servicing costs without having to refinance,” said Patricia.
“We’ve seen VFNs get larger as a percentage of the entire debt, but in the larger scheme they remain a relatively small portion,” said Christopher.
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