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New Financial Products

Craig Allen and the Delphi team have been very fortunate to be able to create several new financial products to serve the needs of clients in the financial markets.

This listing of products developed illustrates the breadth of instruments, techniques and markets that have been affected.

Innovative financial products created by Delphi and Craig Allen

Transaction basics

The Delphi ‘process’ for developing and issuing new financial instruments relies upon the five fundamentals of building such a product:

  • Legal – The legal structure, the legal framework and the legal agreements all form the fundamental foundation for the transaction, enabling prioritization of cash flows for different ‘tranches’ of payments. The rules for the various tranches allow classes of debt instruments with different temporal and credit qualities.
  • Credit – At least in the debt capital markets, being able to model and evaluate various credit events and the ensuing effects on various tranche payments makes a huge difference in the value of those tranches. The ability to come to agreement with rating agencies on the appropriate rating for each tranche of a security is important for most major transactions.
  • Operations – No serious financial transaction can proceed without clear attention to the operational aspects of the transaction. This requires an understanding of the physical constraints of the system; how long it takes to gather and process certain information on collections, how funds are aggregated and transmitted to other parties, how many days to ‘clear’ payments through various payment systems, which party will actually do each part of the process, etc. All of these operational issues must be meticulously worked out to initiate a transaction.
  • Valuation – Most financial instruments require constant valuation for trading or regulatory purposes. And, these valuations depend upon various assumptions about financial conditions, market variables and expected behavior of any borrowers (like default probability, or likelihood to exercise imbedded options, etc.). It is imperative that any debt instrument be able to be valued under many different scenarios in order for it to be marketed.
  • Marketing / Sales – Any financial transaction always involves convincing others that there is something worthwhile about the endeavor. Investors are usually the focus for marketing securities, but often the regulators are the most difficult ‘sale’ of the entire trade.

See this page for a fairly complete listing of the specific transactions Delphi has completed.


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