Structured instruments in corporate financing strategy (Instrumenty strukturyzowane w strategii finansowania przedsiebiorstwa)

Joanna Blach ()
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Joanna Blach: Katedra Finansów, Wydzial Finansów i Ubezpieczen, Uniwersytet Ekonomiczny w Katowicach

Problemy Zarzadzania, 2011, vol. 9, issue 34, 131-149

Abstract: Acquiring corporate funds is one of the most important parts of the company's financial strategy. Modern companies, in order to attract investors' attention and enhance them to provide funds, must compete against each other offering investors financial instruments that meet their requirements in terms of the risk-return profile. Financial engineering creating financial innovations provides companies with the wide range of instruments that can help them to raise the required funds. Structured instruments are one of the latest financial developments, however their application is usually analyzed from the investors' point of view. This conceptual paper assumes changes in the way of the structured instruments' analysis - from the investor's perspective into the issuer's perspective. Therefore, the main objective of this paper is to present the possibilities to use structured instruments in the corporate financing strategy. Based on the theoretical research, the potential application of the structured instruments is described followed by the analysis of their consequences for the company's financial situation. The structured instruments give company many opportunities such as: flexible capital structure, lower cost of capital, adjusted cash flows or the possibility to combine the acquiring funds with the risk management. However, the most important threats connected with the embedded derivative should be also taken into account. The successful usage of the corporate structured instruments requires understanding their mechanism and offering investors securities adjusted to their expectations.

Date: 2011
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