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Technology Stocks : Lucent Technologies (LU)

LU 2.455

+1.7%

12:33 PM EST

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To: Chuzzlewit who wrote (11978)	1/2/2000 1:31:00 AM
From: stilts	Read Replies (2) of 21876

Chuz, if you designed securitization transactions yourself, then you should know there is always a cushion, or collateral (whether in the form of excess assets or by creating a second tranche of securities, subordinated to the first tranche and bearing a much higher yield to the buyers (and cost to the seller). As far as the concept of recourse, or risk of loss to Lu, with which you and RVTucker have tried to spook this thread, the risk to Lu is the same whether Lu did the securitization or not: if Lu had not done the deal, Lu would still have been subject to the same risk of loss if any of the receivables prove uncollectable. By doing the securitization transaction, the only effect it had on Lu was that Lu was able to immediately collect $600 million in cash (at a 4% discount to the buyers for their time value of money). You seem intent on tilting at windmills and alarming people on this thread whose lack of familiarity with financial transactions make them prone to believe there is some substance to your mysterious but spurious accusations.

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