Reborn Capital Empire

Chapter 54: Abs Asset-Backed Securities

Chapter 54 ABS Asset-Backed Securities

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The acquaintance and lingering with Nicole Kidman are destined to be a fruitless dream. The next day, after storing this memory in a certain corner of his heart, Guo Shouyun, who had resumed his normal life, put on his suit and leather shoes and drove to the office of Merrill Lynch in Los Angeles with the documents prepared in advance.

As one of the world’s top five investment banks with an excellent reputation, Merrill Lynch is the largest securities and stock underwriter on Wall Street, and has a financial marketing team that surpasses all investment banks in the world. And this is also one of the reasons why Guo Shouyun took a fancy to Merrill Lynch and chose it.

Of course, as the third-in-command of the top five Wall Street investment banks with good money, Merrill Lynch’s office in Los Angeles is not bad at all. The Pan Am Tower, the tallest building in Los Angeles, occupies an entire floor. The interior decoration is also full of various tall ones. However, it is also necessary for the development of the company. Investment banks are faced with CEOs of large companies, as well as billionaires with assets exceeding 10 million or hundreds of millions. If your office space is too shabby, who will do business with you?

Through the front desk, Guo Shouyun was introduced into Merrill Lynch’s reception room. Not long after, a middle-aged white man wearing a black suit, slightly bald, with gold-rimmed glasses pushed the door and walked in.

Guo Shouyun, who had known the information for a long time, recognized at a glance that the other party was Danny Lewis, the general manager of Merrill Lynch’s Los Angeles Merrill Lynch office, whom he wanted to meet today!

“Mr. Guo, welcome!”

“thanks!”

After taking the initiative to reach out and hold Guo Shouyun’s right hand, Danny Lewis looked at the calm and confident young man in front of him and smiled: “I didn’t expect to write “Pirates of the Caribbean”, “Where’s Fantastic Beasts”, “Fifty Shades of Grey” ” and other famous novels, will be so young! … By the way, Mr. Guo. You must leave an autograph for me later. I am a loyal fan of your books, especially Pirates of the Caribbean!”

Look at Danny Lewis, smiling in front of him. Regardless of whether what the other party said is true or not, at least hearing what Guo Shouyun said just now will make him feel very comfortable. After all, no one likes to hear a good word.

“Thank you Mr. Lewis for your favor, of course signing is not a problem!”

“That’s good! Please take a seat!”

Guo Shouyun nodded and sat down on the sofa beside him.

“What kind of business does Mr. Guo want to handle through our Merrill Lynch?”

Americans do not have as many twists and turns as the Chinese business community, and they go straight to the ground.

“Please take a look at these materials first!”

Guo Shouyun opened his briefcase, took out a file bag and handed it over.

After taking it, Danny Lewis quickly took out the documents inside. After two glances, his eyes lit up, and his attention instantly became highly concentrated.

“I didn’t expect Mr. Guo’s novels to be so popular in the market!”

After reading it, Danny Lewis looked at the young man in front of him, his tone was slightly surprised, and there was a trace of light in his eyes.

Guo Shouyun smiled lightly.

“Mr. Lewis has all the legal documents issued by the ‘Thorn Bird Publishing Company’. The sales data of each book is true and reliable!”

“We believe in the authenticity of these documents. But I’m more curious about what Mr. Guo wanted to do by taking them to Merrill?” Danny Lewis nodded.

“It’s actually very simple, I believe that Mr. Lewis has already guessed it!” After a pause, Guo Shouyun stared at the other party and said solemnly, “I hope to use all the copyright and derivative income of these five sets (books) in the next ten years. , issued $350 million worth of ABS-backed securities through Merrill Lynch!”

“$350 million!”

Danny Lewis frowned slightly. Guo Shouyun is not surprised that he intends to issue ABS securities with the future proceeds of several books.

In early 1998, American rock star David Bowie completed an asset securitization transaction. The deal is based on the publishing and recording rights to 300 songs written by David Bowie over the course of his acting career. The asset-backed securities, rated A3 by Moody’s, raised $55 million and yielded 7.95%. At the same time, this ABS asset securitization also opened a precedent for similar asset securitization by artists, writers, and owners of copyright or royalty income.

But $350 million is a bit high for Danny Lewis.

“This is the financial data from the listing of my 5 sets (books) until now!” Guo Shouyun once again took out a document and handed it over.

“The ‘Pirates of the Caribbean’ trilogy has sold 1.94 million copies so far for 8 weeks, and at a list price of $45, it has generated $87.3 million in revenue. The ‘Fifty Shades of Grey’ trilogy has gone on sale 8 Weekly, 2.86 million units have been sold so far, and it is still growing rapidly at a rate of close to 350,000 units per week. According to its total price of $48, it has now generated $187.28 million in revenue. “Where’s Fantastic Beasts?” It has been on sale for 8 weeks and has sold 4.25 million copies so far, and based on its list price of $20, it has generated $85 million in revenue. The first book in the “National Treasure” series, “Declaration of Independence,” has been on the market for 6 weeks and has sold 2.33 million copies. , according to its price of $16, it currently generates revenue of $37.28 million. “Smart: Ghost Story” has been on the market for three weeks and has sold 890,000 copies. According to its price of $10, it has generated revenue of $8.9 million. ”

“These five sets (volumes) of books have created a total revenue of 406 million US dollars according to the current sales performance. As an author, I can get 15% of the copyright share, which is 60.864 million US dollars! Then deduct 35% of the The highest level of federal personal income tax, and 4.92% state tax, I ended up with a profit of $36.519 million! Now I use the proceeds of 5 sets (books) for the next 10 years to issue a value of $350 million, with an annual yield of 6.48 % fixed-rate ABS asset-backed securities should not be an excessive requirement!”

“Mr. Guo, I admit that your book is indeed very popular. The long-tail effect of the book is also promising enough, but what we worry about is: after five or six years, the boom has subsided, how do you repay the investor’s loan?”

“Why does Mr. Lewis know that the royalty income from the novel is only a part of the total income of the entire work. The profits from subsequent film and television adaptations and the sales of peripheral products far exceed the single copyright income.” Guo Shouyun calmly said.

“Sorry, what we can see now is only your royalties, so we can only talk on this basis. As for the film and television adaptation of the novel and the sales of peripheral products, there is a lack of sufficient financial data and convincing findings. , can’t be used as a guarantee for your issuance of ABS asset-backed securities!” As soon as he finished speaking, Danny Lewis glanced at Guo Shouyun, whose expression remained unchanged, and frowned slightly. Should I say the latter.

However, for the sake of profit, Lewis only spoke after a brief hesitation.

“…Unless Mr. Guo is willing to accept higher interest rates, it will be difficult for this bond of yours to be accepted by investors in the secondary market.”

The difference between the United States and Europe and China is that its capital market is a bond market that is larger than a stock market. That is to say, many companies and institutions that need funds, when raising funds, are more likely to raise funds through securities companies issuing fixed-income or floating-income bonds, rather than entering the stock market. Just like Guo Shouyun, he needs funds now, so he took out the future income of his novel as collateral to issue an ABS asset-backed bond, and first borrowed money from the market.

Of course, borrowing money is also said. The yield of 6.48% is 50 basis points higher than the current yield of 10-year US Treasury bonds. More importantly, Guo Shouyun used the future income of his works as collateral. In terms of the sales of his novels, the risk of this bond is not very high.

But if the yield, that is, the interest, can be higher, when the bond is sold on the secondary market. With a high rating, it will undoubtedly be favored by more investment institutions. Merrill is also more likely to get its own commission as a middleman for bond sales.

Even, in the future, if Guo Shouyun’s 5 sets (books) of novels develop well and the income is amazing. Merrill Lynch can also sell at a higher price, so the income will be higher.

“Mr. Liu Nis, what is the rate of return you hope for this batch of bonds?” Guo Shouyun said indifferently after looking at the other party.

“Like 8%!”

Danny Lewis’ eyes twinkled.

“8%?” Guo Shouyun smiled coldly and stood up slowly, “Maybe I should go to Morgan Stanley or Goldman Sachs!”

After he finished speaking, looking at Lewis who was still smiling, as if he was not worried at all about his leaving, Guo Shouyun packed up his documents without hesitation and put them in his briefcase. Although Merrill was his first choice, it wasn’t his only choice. There are five major investment banks on Wall Street, and thousands of commercial banks with securities investment business. Even if he removes those who are weak, Guo Shouyun is by no means short of options.

“Excuse me, Mr. Lewis! I hope we have more opportunities to cooperate in the future!”

After speaking, without waiting for the other party to reply, he left the sofa with firm steps and pushed open the glass door of the conference room. But just as he was about to step out, Lewis’ voice came from behind.

“Mr. Guo, please wait!”

Guo Shouyun stopped for a moment, turned around and looked directly at Danny Lewis. “It’s a 6.48% rate of return. If Merrill Lynch wants to add more, then we don’t need to continue wasting time!”

The determination in his tone made Danny Lewis frown slightly. UU Reading www.uukanshu.com Regardless of whether the 6.48% yield is reasonable, now he can’t let this $350 million bond slip away from his hands.

“Mr. Guo, before agreeing to your conditions, we need to do an overall risk assessment of your five sets (books)!”

“Yes, but what about the time? It’s too long, I can’t wait for you!” Guo Shouyun nodded.

“One week! We’ll get back to you in one week. But before that, you must sign an exclusive agreement with us. You can’t introduce this business to other securities institutions and individual investors until the results come out!”

After a little consideration, Guo Shouyun said again: “I can sign an exclusive agreement with you, but the time is only three days. If Merrill Lynch’s strength cannot complete the risk assessment within three days, then maybe I should really consider the need for cooperation with you. sex.”

Danny Lewis frowned slightly. Being good at observing words and expressions, he could see that the young man in front of him was not talking about conditions, but planned to do so. Once he refuses, the other party may really not hesitate to look for Goldman Sachs or Morgan. As a peer, this is obviously not what he wants to see.

In addition, with years of financial experience, coupled with the financial documents and sales data provided by Guo Shouyun, Danny Lewis instinctively felt that this was a lucrative business, so he was not willing to give up. The yield of 6.48% is not low either.

Of course, three days are very tight, and the risk assessment cannot necessarily be completed. But having these three days is always a buffer. Thinking of this, he nodded.

“On behalf of Merrill Lynch, I agree to Mr. Guo’s conditions!”

Guo Shouyun nodded and let out a sigh of relief. I haven’t seen the final result yet, but at least it started off smoothly.