Case | HBS Case Collection | February 2006

Fraikin SA

by W. Carl Kester, Vincent Marie Dessain and Monika Stachowiak

Abstract

Provides an example of a so-called "whole business" securitization. In early 2004, Fraikin, France's leading industrial vehicle rental company, compares several alternatives for refinancing a large bridge loan within a year. Presents three primary options: a classic leveraged buyout, an asset-backed loan, and a loan based on securitizing Fraikin's truck rental contracts. Asks students to evaluate the advantages and disadvantages of each option, particularly the securitization. Elicits discussion about why securitization appears to be the least cost financing alternative and whether it is worth the high transaction costs involved.

Keywords: Debt Securities; Transportation; Renting or Rental; Transportation Industry; Service Industry; France;

Citation:

Kester, W. Carl, Vincent Marie Dessain, and Monika Stachowiak. "Fraikin SA." Harvard Business School Case 206-090, February 2006.