In early 1992, Lehman Brothers has a mandate from its partner, American Express Travel Related Services (TRS) Co, the securitization of its consumer charge card receivables portfolio. Currently, 22 July and Lehman and TRS just returned from a "road show", which was carried out in order to convince potential investors of the merits of these new securities. Lehman must now price of securities. Because this is the first ever securitization of charge card receivables, there is no comparable tests that can help in the assessment. However, the securities have features in common with the credit card debt securities, which are by now well accepted. Another comparable is not caused by the financial company debt. This deal is now followed closely competing insurers, investors and management at TRS and Lehman. The "success" could catapult Lehman in becoming a major player in the asset-backed market, while the "failure" would be a serious blow. "Hide
by Andre F. Perold, Kuljot Singh Source: Harvard Business School 12 pages. Publication Date: April 23, 1993. Prod. #: 293121-PDF-ENG
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