The Euronote revolution

Article Abstract:

Euronotes, consisting of note issuance facilities (NIFs) and syndicated note issuance facilities (SNIFs), were initially issued in the 1970s, but did not become popular in Great Britain as a corporate financing alternative until the banking crisis of 1982. In 1985, approximately $70 billion in Euronotes were issued. Euronotes generally take five to ten years to mature and are considered to be flexible financing instruments by issuing firms. For issuers, the Euronote offers the following advantages over traditional financing: the costs of issuance are less than those associated with normal bank facilities, the yield paid out on Euronotes is less than the interest paid on bank facilities, and the amount borrowed is more flexible with Euronotes than other alternatives. For the investors, the Euronote is attractive because it provides more diversification of risk within the investor's portfolio, the yield is higher than that available from a bank deposit, and many institutional investors have higher credit ratings than the banks with which they are expected to leave deposits. The accounting for Euronotes and tax treatments afforded by Euronotes in Great Britain are also discussed.

Innovations, Securities, Investments, National debt, Public debts, Eurobond market

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The making of an MBO

Article Abstract:

Reasons for a management buyout (MBO) include disposal of a company's division or subsidiary due to financial problems of the parent company, financial losses of the subsidiary, external factors, the prevention of management walk-outs, or as an alternative to selling the business. Criteria for suitable management buyout candidates include the strength of the management team, a positive cash flow of the business, the price paid, and the company's ability to generate cash. It is suggested that a company approach the financier before it approaches the vendor. Planning is essential to the preparation of the MBO proposal. Sources of financing an MBO include pension funds, insurance companies, venture capital funds, and local authorities.

Economic aspects, Acquisitions and mergers, Corporate reorganizations, Leveraged buyouts

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Profit is not enough

Article Abstract:

An overview is provided on how to prepare a cash flow statement, which is created to assist in the assessment of a business's liquidity. The statement is prepared using information from the business's balance sheets and profit and loss account.

Planning, Cash flow

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