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[Title] Financing Innovations [Download] Download pdf file [Description] 
The last two decades have seen a stream of innovation in financial markets, especially in the corporate bond arena. Some of these innovations were designed to give firms more flexibility in designing cash flows on borrowings, allowing them to match up cash flows on financing more closely to cash flows on assets, thus increasing their debt capacity. Some firms are issuing these new and more complex securities for the wrong reasons – to keep up with other firms in their peer group, and to take advantage of loopholes in the way ratings agencies and regulatory agencies define debt and equity. In this paper, we take a big picture view of financing innovations, and some of the good and bad reasons for innovations.
Value Investing: Timeless Reading
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