Public companies acquire most of their outside capital from debt fi nancing and, more specifi cally, leveraged finance--an asset class that falls somewhere between traditional fixed income and stocks. While this type ofdebt fi nancing carries significant risk to both investorsand companies, the potential returns make leveraged finance a cornerstone of the modern financial markets. Leveraged Financial Markets is a gathering of the most astute and informed minds in the business.The powerhouse editorial team of William F. Maxwell and Mark R. Shenkman have handselected contributions from the top practitioners and thinkers working in leveraged finance today. The result is an authoritative guidebook that providesyou with what you need to navigate the highyield market in the integrated global economy. Packed with a wealth of analytical models illustrating the realities of distress probabilities and losses in default, Leveraged Financial Markets gives you all the insight and strategies you need to: Use the Sharpe ratio to measure the return versus risk for high-yield debt - Develop and oversee a portfolio of high-yield bonds - Value individual high-yield issuances It also updates you on changes in the high-yield bond market and features in-depth coverage of numerous debt vehicles leveraged in the market today, including collateralized debt obligations (CDOs), credit derivative swaps (CDSs), collateralized loan obligations (CLOs), andleveraged loans. Leveraged Financial Markets is your blueprint tobecoming a virtuoso of this resilient and popular asset class. WILLIAM F. MAXWELL is a professor of fi nance. He holds the Rauscher Chair of Financial Investments at the Cox School of Business, Southern Methodist University, and he has held professorships at the University of Arizona, Texas Tech, and Georgetown. Maxwell is the author of numerous articles for academic journals and is the coauthor of High-Yield Bonds . He lives in Dallas, Texas. MARK R. SHENKMAN is President and Chief Investment Offi cer of Shenkman Capital Management, Inc., one of the world’s largest high-yield money management firms. Shenkman has held major high-yield bond positions since 1977 at First Investors Asset Management, Lehman Brothers, and Fidelity Management and Research. He is also the coauthor of High-Yield Bonds . Shenkman lives in Greenwich, Connecticut. McGraw-Hill authors represent the leading experts in their fields and are dedicated to improving the lives, careers, and interests of readers worldwide WILLIAM F. MAXWELL is a professor of fi nance. Heholds the Rauscher Chair of Financial Investments at the Cox School of Business, Southern Methodist University, and he has held professorships at the University of Arizona, Texas Tech, and Georgetown. Maxwell is the author of numerous articles for academic journals and is the coauthor of High-Yield Bonds . He lives in Dallas, Texas. MARK R. SHENKMAN is President and ChiefInvestment Offi cer of Shenkman Capital Management, Inc., one of the world’s largest high-yield money management firms. Shenkman has held major high-yield bond positions since 1977 at First Investors Asset Management, Lehman Brothers, and Fidelity Management and Research. He is alsothe coauthor of High-Yield Bonds . Shenkman livesin Greenwich, Connecticut. LEVERAGED FINANCIAL MARKETS A COMPREHENSIVE GUIDE TO HIGH-YIELD BONDS, LOANS, AND OTHER INSTRUMENTS By WILLIAM F. MAXWELL, MARK R. SHENKMAN The McGraw-Hill Companies, Inc. Copyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved. ISBN: 978-0-07-174668-7 Contents Chapter 1: An Overview of Leveraged Finance William F. MaxwellChapter 2: The Components of the Leveraged Finance Market William F. MaxwellChapter 3: Understanding the Role of Credit Rating Agencies William F. Maxwell, and Philip DelbridgeChapter 4: Leveraged Loans as an Asset Class Daniel ToscanoChapter 5: Collateralized Loan Obligations Frederic R. Bernhard, CFA, John E. Kim, and Jonathan A. SavasChapter 6: Differences between CLOs and Structured Finance CDOs Jonathan BlauChapter 7: Credit Analysis and Analyzing a High-Yield Issuance Amy Levine, CFA, and Nicholas Sarchese, CFAChapter 8: Bond Indentures and Bond Characteristics William J. Whelan, IIIChapter 9: Credit Models for Assessing Firm Risk William F. Maxwell, and Philip DelbridgeChapter 10: Performance of Credit Metrics William F. Maxwell, and Philip DelbridgeChapter 11: Principles of Managing High-Yield Assets Mark R. ShenkmanChapter 12: The Pitfalls of Managing High-Yield Assets Mark R. ShenkmanChapter 13: Performance Analysis Frederic R. Bernhard, CFAChapter 14: Trading in the High-Yield Market Neil Yaris, and Jason HodesChapter 15: CDS: A Primer on Single Name Instruments and Strategies Sivan MahadevanChapter 16: Leveraged Loan CDSs Vishwanath Tirupattu and Sivan MahadevanChapter 17: Debtor-in-Possession Financing William F. Maxwell, and Philip DelbridgeChapter 18: Distressed Investing David J. Breazzan