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Structured finance is the use of various layers of debt and equity to attain the number needed to effectuate the buyout. The assets of the target are used to collateralize a prime layer of debt, a layer of equity is required to make the deal and there is often a layer of debentures, sometimes at the level of junk bonds, based on the presumed ability of the cash flow of the target to pay off.

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Q: How do you use structured finance in order to finance buyouts?
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