- Introduction to Debt
Financing and Restructuring
Objective: To review the opportunities
for debt financing and discuss the variety of
forms of debt financing which can be used.
- Overview of types of corporate debt funding
- Debt - short and long term funding
instruments
- Quasi debt instruments - mezzanine
finance
- Warranted and warrantless products
- Bank loan structures
- Corporate financing decisions and
use of debt finance
- Debt- equity swaps
- Loan documentation issues
- Participants in leveraged activities and
use of debt financing in private equity
situations
- Leveraged buyout, forms and characteristics
- MBO, MBI and other forms of buyout activity
- Strategic positioning in an IBO
- Corporate divestment and equity carve
out
- Debt financing in M & A
- Capital structure
- Debt financing management
- Earn out structures
Case study: Structuring a leveraged buyout deal
using a variety of debt instruments
- High Yield Corporate
Bonds and Mezzanine Debt Finance
Objective: To evaluate the use of
high yield corporate bonds and mezzanine debt
instruments as alternative financing covering
a variety of business sectors and countries
- The role of high yield bonds in corporate
financing activity
- The current state of the high yield market
in Europe and the US
- Use of high yield bonds in privatisations,
corporate restructuring and M&A activity
- Recapitalisations
- Emerging market risk and high yield bond
issues
- Mezzanine debt structures
- Use of PIKs and second liens
- Warrantless mezzanine opportunities
- Mezzanine versus high yield bonds
- High yield debt pricing
- Structural versus contractual subordination
Case study examples to allow practical application
of debt financing techniques
- Credit Derivative
Products
Objective: To explain the structure
and rationale of credit derivative products
within debt financing structures.
- Use of derivatives in risk management
and investment
- Asset swaps and repackaged swaps
- Credit default swap
- Defining the event of default
- Pricing the swap
- Credit linked notes
Case study: Examples of a credit default swap and a credit linked note structure
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- Asset Backed Securities
Objective: To explain the increasing
use of ABS structures in debt financing
- Introduction to ABS Market
- History of ABS development
- Fundamental principles of an ABS
deal
- Parties to a typical ABS structure
- Overview of the most important tax,
legal and accounting issues
- Current market developments in the
use of ABS structures
Case study: Identifying the opportunities for
securitisation in an acquisition scenario
- Fundamental corporate
ABS structures
- Conduit financing of receivables
- Future flow transactions
- Whole business securitisation
- Credit enhancement
- Importance of credit enhancement structures
- Basic external mechanisms
- Bank guarantees and letters of credit
- Pool insurance
- Monoline insurance
- Guaranteed investment contracts
- Basic internal mechanisms
- Debt subordination
- Over collateralisation
- Excess spread accounts
- First loss retention
Case study: Analysing the risk of a future flow
ABS structure
- Project Financing
Objective: To explain the role of
project finance in corporate funding structures
- Project finance funding structures - mix
of equity, secured debt and mezzanine debt
- Typical use of project financing - when
to use rather than other financing methods
- Main contractual arrangements in a project
financing - off take contracts, guarantees
and concession agreements
- BOT, BOO, BOOT and other structures
- Sources of financing
- Credit enhancement and security
- Why projects fail
Practical exercise: Proposing a financing plan
for a gas project
- Corporate Financing
Summary
- Financing alternatives
- Why to use debt or equity
- Why and when to use particular products
or structures
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