Course dates
The course will use real life case studies and examples of transactions to develop participants' understanding of the techniques being discussed. Most of the case studies are designed to encourage delegates to think more closely about the issues involved and discuss them as a group. Some case studies will require participants to bring laptops to manipulate Excel spreadsheets.
The course is designed to improve the participants' skills in acquisition analysis, structuring and valuation. Many examples will be provided to illustrate the key principles and to develop participants' understanding of real-life applications.
This 3-Day Intensive Program Featuring:
- How leverage facilitates the achievement of corporate objectives
- Using leverage to lower the weighted average cost of capital (WACC)
- Multiple based valuation
- Valuation triangulation
- LBO structuring
- Different types of leveraged transaction
- Other hybrid instruments: convertibles, structured products
- Restructuring
- Second lien financing
- Mezzanine and non-senior debt financing
- Changes to covenant structures post-credit crunch
Day 1
LBO STRUCTURING
Session 1
Introduction to Mezzanine instruments
• Financial analysis: producing pro forma projections
• Establishing the amount of debt that can be used
• Assessing the type of debt that can be used
• Computing the blended cost of capital
• Disadvantages of the high level of gearing
CASE STUDY:International acquisition using bridge financing
Session 2
Leveraged buy-outs• Different types of transaction: LBO, MBO, MBI, BIMBO, IBO, LBU, P2P, etc.
• Acquisitions suitable for leveraged finance
• Deal structuring: equity and debt (including senior and mezzanine debt)
• Refinancing with bonds or other capital instruments post acquisition
• The leveraged buy-out process
CASE STUDY:A large multinational LBO
Session 3
Secondary buy-outs (SBOs)• Structure
• Financial economics
• Management participation
• The envy ratio
• Exit strategies
CASE STUDY:Building materials group buy-out of a buy-out
Session 4
Restructuring as a strategic option
• The theory
• Impact on incentives
• Mechanics: share buyback or special dividend
• The benefits
• Leveraged recap to release value for owners
• Leveraged recap as a defensive strategy
CASE STUDY: M&B refinancing
Day 2
CREDIT RATIOS IN LBO DEALS
Session 1
Mezzanine finance structures
• Key ratios determining the financing structure
• Preparing projections for the appraisal of an LBO and mezzanine opportunity
• Likely changes in loan covenants after the credit crunch
• Mezzanine in structure products (such as securitized debt)
• Using Monte Carlo simulation to simulate credit scenarios
• Non-bank financial institutions (structured investment vehicles – SIVs)
CASE STUDY: Whole business securitization
Session 2
Second lien financing
• Definition
• Providers
• Security arrangements
CASE STUDY:Second lien financing in an LBO
Session 3
Mezzanine and non-senior debt financing
• Senior versus non-senior debt
• Mezzanine debt capacity
• Cost of mezzanine
• Using warrants to deliver value to lenders
• Subordination: structural and contractual
CASE STUDY:Inter creditor agreements in an LBO
Session 4
Other mezzanine financing instruments: hybrids, convertibles
• PIK notes +/- warrants
• Cost of finance
• Subordinated debt
• High yield debt
• Convertibles
• Hybrid securities
• Restrictions, covenant structures
CASE STUDY:High yield bond issue
Day 3
DISTRESS AND RESTRUCTURING
Session 1
The road to financial distress
• Symptoms of distress
• Causes of distress
• The cycle of distress
• The role of covenants as early warning devices
• The rating agencies and missed problems
• Distressed security prices
• Systemic distress or ad hoc distress
• Speed of recognition versus management denial
CASE STUDY:Americredit and the US car industry
Session 2
Business plan failures
• Critical assumption failure causing distress
• Technological failure
• The Iridium case
• Revenue failure
• Project financing failures
CASE STUDY:Channel Tunnel restructuring
Session 3
Pre-distress restructuring actions
• Management led business restructuring ahead of distress
• Cutting costs to meet a lower level of business activity
• Financial restructuring ahead of projected or possible distress
• The distressed debt investor’s approach to selecting distress candidates
CASE STUDY: Raising equity for a major property company (Hammerson) before covenant breaches cause financial distress
Session 4
Restructuring options
• What business levels can be projected in the future
• Can the projections support the current debt burden?
• Does the company need more cash to execute the new plan?
• Approaches to insolvency (INSOL Principles)
• Workouts
• Prepackaged deals
• Court led/judicial restructurings
• Comparing international approaches
CASE STUDY:Parmalat and the Marzano Law
New York Hotel, New York, United States
This program takes place on a non-residential basis at a New York hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
As with all Euromoney Training programmes on-site administrators are with you throughout the programme to ensure smooth administration and group interaction.
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Paul Richards
Paul Richards graduated from Cambridge University in mathematics and has a Masters degree in business administration from London Business School. He is also a CFA charter holder, an Associate of the Chartered Institute of Bankers, a Member of the Association of Corporate Treasurers and a Fellow of UKSIP.
Paul has more than 20 years investment banking experience specialising in domestic and international corporate finance at UBS (Warburg), HSBC and Map Securities (part of Skandia Insurance and Mapfre, Spain). He was also the chief executive of the London merchant banking operation of Credit Industriel et Commercial, a major French banking group.
As a result of this experience, Paul has extensive first hand experience of: Mergers and acquisitions; IPOs; bond issues; secondary market issues; privatisation; debt syndications; corporate treasury; equity valuation; investment analysis; security and derivative valuation; private equity; modelling; corporate governance; and compliance.
Paul won the 2004 Wincott Foundation Prize for his article "Lessons in shareholder value" on the boom and bust in new economy stocks, published in Professional Investor (the journal of the UK Society of Investment Professionals - the UK member society of the CFA Institute). He has taught MBAs and Masters to Finance students at Cass and Cranfield Business Schools for more than 12 years in a range of financial disciplines; and has trained staff at major City houses and in banks on different continents.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
20-22 Jun 2012 (Miami, United States)
The course begins by concentrating on spreadsheet best practice, auditing and the advanced use of Excel. These skills are then applied to the construction of financial, valuation and investment models. Delegates learn how to incorporate forecasting, optimization, risk assessment and sensitivity scenarios into these models. The course is taught using a step-by-step approach to enable delegates to construct financial models for a wide range of practical scenarios.
29 Oct 2012 - 1 Nov 2012 (New York, United States)
For purposes of this course, each of the four days is divided into two modules, resulting in a total of eight modules for the entire course. The outline presents teaching objectives, lectures and case work in each of the different modules.
11-13 Jun 2012 (New York, United States)
The aim of this course is to provide participants who already have some transaction experience with further exposure to M&A, company valuation and deal structuring and financing. You will also be introduced to international practice in executing mergers and acquisitions, including an appreciation of today's market practices and procedures including due diligence, accounting issues and valuation techniques.
10-13 Dec 2012 (New York, United States)
Advanced Corporate Finance Techniques explores the broad realm of complex financing tools available to corporate issuers. You will develop strategies used to create value-adding debt financing transactions, considering many of the latest debt financing alternatives available today.
26-28 Mar 2012 (New York, United States)
This three-day course has been designed to provide participants with a solid understanding of the business valuation fundamentals and their application. The course emphasizes the practical aspects of the valuation process providing participants with an opportunity to develop and enhance their business valuation skills
10-13 Dec 2012 (New York, United States)
Bankers, investment managers, company executives and professionals in all corporate functions and in organizations servicing corporate need to have a current understanding of the financial issues that affect the process of launching an IPO. This program is designed to enable participants to become proficient in their understanding of the IPO process. It covers a broad spectrum of topics which are designed to ensure that participants are equipped with the financial skills necessary to understand how IPOs are arranged, managed, priced and distributed
11-13 Apr 2012 (Port of Spain, Trinidad and Tobago)
This training course is designed to provide delegates with a concrete understanding of all aspects of foreign exchange. Participants will learn how to identify and manage foreign currency exposure, how the foreign currency markets work and how to be an effective player in these markets. This intensive course uses a balance of lectures, workshops, case studies and discussions.
22-24 Aug 2012 (Miami, United States)
With the financial world currently undergoing significant changes, one of the most important challenges in banking is to reinforce the syndicated loan function and to refresh techniques given the evolution of the syndicated loan market. This course enables you to ensure that your staff – whether bankers, lawyers or investment professionals – have the tools to cope with the new environment.
23-27 Apr 2012 (New York, United States)
Company valuation is used for the purposes of investment, M&A or as part of internal measures of financial control. It is extensively applied when companies issue new shares, divest operations or acquire other companies. The rapidly growing private equity industry is also dependent on solid analysis. There are many different approaches to the analysis and valuation of companies and it is paramount to know when and how to apply what method. It is also essential to understand that company analysis is not an absolute science but also based on interpretation and judgment. This highly practical course will lead you quickly from the basics through to the more advanced valuation methodologies and modeling techniques
17-21 Sep 2012 (New York, United States)
This course covers all stages of the company’s financial development from inception (venture capital) to equity raising by an IPO, then expansion by M&A and the associated financing (including bank financing and bond issues) and appropriate risk management techniques (hedging) through to maturity (possible LBO candidate) and finally decline and financial distress
Course dates