Finance Subsidiaries: A New Way to Access Capital Markets

  • July 24, 1989
  • • Written by: Daniel E. Page Charles Kroncke

Spring/Summer 1989, Vol 14, No 1

Abstract: The finance subsidiary is the latest financial management tool for savings institutions (S&Ls). The subsidiary raises capital by issuing securities at rates lower than the S&L can offer, the most popular security being a dutch auction rate preferred stock (DARPS). This article examines the creation of finance subsidiaries, and how a failing S&L raised new capital by issuing DARPS.