Fremont is a financial asset based lender middle market companies. The firm has three options to raise capital to fund its loan portfolio. Fremont may (1) to expand its existing bank line of credit, (2) the issuance of commercial paper through a special purpose channel, or (3) the securitization and sale of the loan portfolio in the capital markets. The case highlights the problems and possible solutions of asymmetric information and moral hazard problems that are endemic to financial intermediation. "Hide
by Erik Sirri, Ann Zeitung Source: Harvard Business School 28 pages. Publication Date: February 16, 1994. Prod. #: 294054-PDF-ENG
Related Case Solutions & Analyses:
Active Coatings Inc.: Challenges in Managing Product Development (A)
Wainwright Industries (A): Beyond the Baldrige
Value Pricing at Procter & Gamble (B)
Frost Inc. (A)
Rohm and Haas (B): 1989 Update on Kathon MWX
Walmart around the World
Standing up for Steel: The US Government Response to Steel Industry and Union Efforts to Win Protection from Imports (1998-2003)
Telecommunications Act of 1996
Threat of Terrorism: Epilogue
Cargill (A)
