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Product Overview

This case examines a proposed $2 billion asset-backed securitization offering that is to be supported by F1's TV broadcasting rights. The case is written from the perspective of Steve Din, executive director of Securitization for Morgan Stanley Dean Witter, who is responsible for placing the securities in September 1998. The proposed Eurobond issuance for F1 follows a delayed IPO in 1997 that failed to materialize owing to disputes with the F1 teams. Students must recommend a course of action to meet the challenges of marketing the new issue. The case is designed for use in finance electives focusing on financing methods, investment banking, securitization, or other advanced topics in corporate finance.

Learning Objectives

The case can be used for the following purposes: • To familiarize students with the process of asset securitization • To help students understand the sources of value by breaking up assets into separate units • To discuss the security provided to bondholders when the collateral for debt is made up of intellectual property (the TV broadcasting rights to Formula One) • To have students suggest how to enhance the features of an offering to make an issue more marketable and attractive to investors • To discuss the different considerations that motivate the placement of an issue in the public, private, or Rule 144A debt market