Structured Finance

Structured finance is a heavily involved financial instrument presented to large financial institutions or companies with complicated financing needs who are unsatisfied with conventional financial products.

Structured financing allows utilities to borrow funds by using their collections (cash flow) as security rather than using their physical assets as collateral. The benefit of structured financing is that the entity can use its liquid assets derived from its illiquid infrastructure as an alternative funding source.

Structured financing helps to reduce the risk to the lender, which results in lower interest rates and better terms.

Structured financial products, such as collateralized debt obligations, are non-transferable.