Course dates
Course overview
A new generation of Asian growth enterprises has taken advantage of global investor interest to raise long-term, non-dilutive capital in the high-yield bond market.
This course looks at the emergence of the Asian high-yield sector, key issuance drivers and demand dynamics. It examines the intricacies of Asian high-yield bond structuring, interpretation of covenant packages, as well as documentation and execution aspects. The course also sheds light on successful and failed restructuring efforts of Asian high-yield bonds in various jurisdictions.
You will learn the motivations behind issuing and investing in high-yield bonds. The course will familiarize you with key concepts, structuring aspects and covenant packages on Day 1. This will be followed by a comprehensive review of the new issuance process, encompassing due diligence and disclosure, documentation, marketing, bookbuilding, pricing and the credit ratings process on Day 2. An analysis of recent high-yield restructurings will introduce participants to the downside of high-yield investing and what recovery assumptions should be made.
Summary of course content
- Overview of historical and current developments in high-yield bond markets in the US, Europe and Asia
- Overview of key concepts, structuring issues and covenants of Asian high-yield bonds
- Interpretation of covenant packages
- Review of offering structures, timetable and principal documentation
- Comprehensive evaluation of new issuance processes
- Detailed analysis of high-yield bond restructuring in various jurisdictions
- Liability management and implications for issuers and investors
Who should attend?
- All fixed income professionals
- DCM originators
- Leveraged finance specialists
- Corporate finance functions
- Investment bankers
- CFOs and corporate treasurers
- Asset and hedge fund managers
- Private bankers
Supporting publications:
DAY ONE
Welcome and introduction
Definition of high-yield bonds
- Introduction to high-yield bonds
- High-yield vs. emerging market issuers
Short history of the high-yield bond market
- Fact vs. fiction
- Developments in the US
- Developments in Europe
- Asia's first generation high-yield market
- Asia's second generation high-yield market
Asia's high-yield bond issuers and investors
- Supply drivers
- China's real estate boom
- Natural resources in demand
- Capex needs
- Demand drivers
- Liquidity factors
- Development of a high-yield investor base
- Asset managers and hedge funds
- Proprietary trading accounts
- Private banks
- Buy-side challenges
Offering structure, timetable and principal documentation
- Changing capital structures
- Key concepts of high-yield bonds
- Structural, contractual and other types of subordination
- Typical offering structures for Asian high-yield bonds
- Security packages of high-yield bonds
- Guarantees
- Share pledges
- Cash waterfall structures
- Others
- Why use covenants?
- Interpretation of high-yield bond covenants
- Limitation on indebtedness (FCCR ratio, permitted indebtedness, exceptions to ratio debt, permitted refinancing indebtedness)
- Limitation on restricted payments (permitted investment definition, ability to make minority
investments, pay dividends)
- Limitation on dividends and other payment restrictions affecting restricted subsidiaries
- Limitation on sales and issuances of capital stock in restricted subsidiaries
- Limitation on issuances of guarantees by restricted subsidiaries
- Limitation on transactions with shareholders and affiliates
- Limitation on liens
- Limitation on sale and leaseback transactions
- Limitation on asset sales
- Limitation on the company¡¦s business activities
- Early redemption options
- Non call features
- Change of control put
- Equity clawback
DAY TWO
The offering and credit ratings processes
- Sample timetable
- Selection of bookrunners
- Disclosure and documentation of high-yield bonds
- Due diligence and disclosure process
- The Offering Memorandum
- Financial statements and financial information
- Marketing and roadshow
- The bookbuilding procedure
- Technical and environmental pricing variables
- Credit ratings seniority
- Callability
- Zero coupon status
- Issue size
- Issuer status
- Relative value
- Default rates
- Equity valuations
- Competing supply
- Mutual fund flows
- Industry category
- Management presentation
- Issue stricture
- Ability to foreclose on collateral
- The credit ratings process
- Credit ratings basics
- Rating agency considerations
The Asian high-yield private placement market
- Structures
- Issuance drivers
- Issuance procedure
- Attractions for investors
The downside: high-yield bond restructuring in Asia
- Corporate defaults and recovery
- Insolvency regimes in Asia
- Recovery value comparison
- Liability management / restructuring options
Case studies: what works and what doesn't?
- Implications for corporate issuers and investors
Outlook and closing remarks
InterContinental Grand Stanford Hotel, Hong Kong, Hong Kong
This programme takes place on a non-residential basis at the InterContinental Grand Stanford 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.
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Florian Schmidt
Course Director - Florian Schmidt
Florian is Managing Director and Head of Debt Capital Markets, Asia, with ING Bank, based in Singapore. He has been professionally involved in Asia's debt capital markets for almost 20 years. During that time he originated and executed a large number of bond issues across the region, encompassing high-yield, high grade, public, private, G3 and local currency offerings. Notable within the high-yield context were, amongst others, award winning transactions like the complex US$250MM senior notes issue due 2012 for Indika Inti Energi, which was named "Best High-Yield Bond 2007" by FinanceAsia, or the US$315MM guaranteed senior secured notes issue due 2015 for PT Bukit Makmur Mandiri Utama as part of a leveraged buyout that was named "Indonesia Capital Markets Deal of the Year 2009" by IFR Asia and FinanceAsia. More recently he was involved in a benchmark US$550MM senior notes issue due 2015 for China Oriental Group. Florian has also transacted some of Asia's high profile liability management exercises, including tender offers and distressed exchange offers, most notably and recently for PT Davomas Abadi and Titan Petrochemicals Group.
Apart from his work as a practitioner Florian has authored two reference books with relevance to the high-yield bond market: "A Guide to Asian High-Yield Bonds" and "Asia's Credit Markets", published by John Wiley & Sons (Asia) in 2008 and 2004, respectively. He holds a Masters Degree in Business Administration from the University of Münster, Germany.
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.
Course dates