Euromoney Audit Training

Course overview

'Distressed Debt and Syndicated Loan Market' will equip professionals with limited experience of distressed debt or who are new to this sector with necessary knowledge to be able to appreciate the terminologies, compliance, legal and practical steps to help maximise returns in workout situations.

Summary of course content

• Obtain an understanding of distressed market dynamics, principles and players
• Learn key technical and legal issues
• Analyse debt structures, underlying company problems
• Receive a toolkit of valuation methodologies and restructuring solutions
• Implement strategies to maximise benefits during a workout and through a distressed trade
• Learn effective loan trading strategies (from initial planning through to implementation)

Methodology

This three day intensive training course will consist of interactive presentations and workshops including distressed valuation modelling assumptions and distressed trading exercises.

Who should attend this training course?

• Credit analysts
• Distressed investors
• Institutional investors
• Private equity analysts
• Portfolio managers
• Loan traders
• Financial advisors
• In-house lawyers and lawyers working for restructuring team
• Agency and middle office executives
• Financial advisors
• Accountants working for restructuring team 

 Supporting publications:

      

Day 1

Overview of market definitions, statistics and transaction timetable

· Definition and characteristics of a syndicated leveraged loan

· Common structures, uses and key defining terminology

· Transaction timetable

Overview of documentation

· Loan Market Association (LMA) and others (e.g. LSTA)

· Investment grade and leveraged primary documentation

· The documentation cycle

Mandate and term sheet

· This session will examine the mandate letters and term sheets with discussion on key clauses highlighting the commercial significance for borrowers and lenders

o Types of facilities common to leveraged loans

o Mandate letters

o Confidentiality and NFR letter

o Term sheet

Case study: Mandate for HiLevPac

Practicalities

· Role of agent

· Role of MLA / arranger

· Role of and rights of participating banks

· Building a business as a participant bank

Case study: Assessment of the merits of an invitation to participate

Distressed Debt and the Syndicated Pricing a leveraged loan

· Sources of information

· Trade-offs between price, maturity and credit structure

· Assessing market appetite

· Underwriting and distribution strategies

· Sub-underwriting

· Syndication

· Club

· Secondary

Syndicating and closing a leveraged loan

· Investor materials - PIM, due diligence reports, bank meeting

· Data room

· Timetable

· Private vs. public

· Allocation

· Free to trade

Case study: HiLevPac at the close

Day 2

Distressed debt in leverage land

· Problems and the solutions

Overview and historical perspective on distressed debt and restructurings

· History and development of the market

· Major market players and their roles

Debt structures

· Leveraged vs. non-leveraged structures

· Long term vs. short term solutions - haircut or sticking plaster?

· Cram downs

· Due diligence

· Multiple jurisdictions

What causes default? The key problems

· Over-reliance

· Borrowing short

· Over-leverage

· Volatility and Black Swans

· Complacency

Case study: HiLevPac in distress

Overview of the agent and the London approach

· Role of the agent bank

· The ‘London Approach’ in action

· The Asian variation

· INSOL principles

· Development

Standstill arrangements key principles and

Structures

· Requirements for successful appointments

· The role and duties of the steering and coordinating committee

· Appointment letters

· The practicalities

Case study: FECSA

Recent defaults and restructurings - the 2009/10 experience

· Background

· Early warning signs

· Legal position

· Creditor dynamics

· The restructuring process

Workshop: Delegates will work in small groups analysing recent restructurings

Day 3

Exit routes from distressed debt - restructuring or secondary trading?

The importance of valuation and the Independent Business Review / accountants’ report

· Content of the Independent Business Review

· Going concern or liquidation?

· Techniques

· How to find the level of ‘sustainable’ debt

Restructuring solutions for distressed leveraged loans

· Write-offs

· New money

· Disposals

· Corporate restructurings and turn-arounds

· Risk / reward

Case study: HiLevPac in the secondary market

Secondary loan trading of distressed debt

· Development of the market

· Key drivers

· Main players

· Settlement

· Market practice

LMA Par and distressed documents

· Latest documents

· Key changes

· Legal issues

Which route to take to exit: restructuring or secondary sale?

Workshop: Trade confirmation

Course summary and close

• Michael Contstant

  Michael Constant is a former vice chairman of the loan market association and was previously head of syndicate at Natixis and managing director of loan syndication at JPMorgan Chase. He has worked in banking for 35 years and has had two main roles during his career – syndicated loans and project finance. He has recruited, developed and led teams in Asia, the Middle East and Europe as well as working in North America and Africa. He has focused on all types of complex, structured financings and has been involved in several restructurings including co-chairing the FECSA steering committee.

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.

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