Corporate Financial Restructuring
- fix the equity
- fix the debt
- fix the control
Instructor
Dr. Ian Giddy has taught finance at NYU, Columbia, Wharton, Chicago and in 30+ countries abroad for the past two decades. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. The author of more than fifty articles on international finance, he has served at the International Monetary Fund and the U.S. Treasury and has been a consultant with numerous corporations and financial institutions in the U.S. and abroad. As a banker and consultant he has been involved in the growth of the ABS market in the USA, Europe and Asia. He has a PhD and an MBA from the University of Michigan, and a BSc from Witwatersrand University. He is the author or co-author of The International Money Market, The Handbook of International Finance, Cases in International Finance, Global Financial Markets, Asset Securitization in Asia and The Hudson River Watertrail Guide.
Prof Ian Giddy
Stern School of Business
New York University
44 West 4th Street
New York, NY 10024
USA
+1 212 998 0332
Related websites:
giddy.org
giddyonline.com
financefixit.com
asiansecuritization.com
Workshop on Structured Finance
Ian Giddy
New York University
Structured Finance is the design of debt or equity financing techniques in order to solve particular issuer or investor problems that cannot be solved by conventional methods.
Schedule and Case Study Assignments
Day 1
Financing with Asset-Backed Securities
| Time | Topic | Remarks |
| 8:30-10:00 | Introduction to structured finance and review of corporate financial
restructuring
Asset-backed securities: rationale and process |
Selection of live case studies (see Seagate; CCM; ASAT; MANDO)
Discussion of Finance Company Bhd and other cases |
| 10:00-11:00 | Legal, accounting and regulatory issues in ABS | Discussion of 6 Battery Road and KAMCO cases |
| 11:00-12:00 | Special topic: Securitization of trade receivables | ABCP case study: Phebus or CAST |
| 12:00-13:00 | Working lunch | Group work on Ford Motor case study |
| 13:00-14:00 | Office time | |
| 14:00-15:00 | ABS cost-benefit evaluation | Analysis of Ford Motor case |
| 15:00-16:00 | Special topic: CLOs and CDOs | Case studies: KAMCO and Singa |
| 16:00-17:30 | Applications of securitization: when is it suitable for DBS clients? | Discussion of Hong Kong Cards case |
Day 2
Leveraged and Acquisition Finance
| Time | Topic | Remarks |
| 8:30-10:15 | The role of leverage and structured securities in Western and Asian M&A deals | CCM, ASAT and Mando cases
Applications of valuation in acquisitions and divestitures |
| 10:30-12:00 | How to structure and price the leverage for an acquisition. | John M Case leveraged finance case |
| 12:00-13:00 | Working lunch | Group analysis of Infox case |
| 13:00-14:00 | Office time | |
| 14:00-14:30 | Leveraged buy-out case study | Discussion of Infox case |
| 14:30-16:00 | Leveraged build-up and leveraged recapitalization | K-III and Sealed Air case studies |
| 16:00-17:00 | Post-acquisition leveraged finance | EMAS case study |
| 17:00-17:30 | Discussion: When is it suitable for Asian companies? | Singapore applications |
Day 3
Structured Notes and Debt-Equity Hybrids
| Time | Topic | Remarks |
| 8:30-9:00 | When should a company issue quasi-equity or hybrid securities? | Discussion of financing choices flowchart and PEPS exchangable bond |
| 9:00-10:00 | Callable bonds, options, swaptions and other fixed-income derivatives embedded in structured financing techniques | Demonstation of hands-on use of pricing models |
| 10:00-12:00 | Design and pricing of fixed-income structured notes | Group work on reverse floater case |
| 12:00-13:00 | Working lunch | Case study: Enron credit-sensitive notes |
| 13:00-14:00 | Credit swaps, synthetic ABS, and related instruments | Discussion of Enron |
| 14:00-15:00 | Design of convertibles, warrants and other debt-equity hybrids | Singapore and regional applications |
| 15:00-17:00 | Group work on live case studies | |
| 17:00-17:30 | Summary of workshop and next steps |
Participants will benefit from reading some or all of the following before the workshop.
- "Securitization 101" by Sunil Gangwani. A brief but good introduction to the ABS technique.
- What is Leveraged Finance?
- Understanding and Using Hybrid Instruments by Ian Giddy
The
Market
Useful
Articles
- Note on European Buyouts
- A Note on Private Equity in Developing Countries
- "Asset Securitization in Asia" by Ian Giddy
- Introduction to CLOs Fitch IBCA
- What the Ratings Mean Standard & Poors Just the definitions
- Emerging Market CBO Criteria Fitch IBCA. A comprehensive article on how a rating agency evaluates the structure and risks of collateralized bond obligations.
- Understanding Asset-Backed Commercial Paper Fitch IBCA A widely used technique for financing trade receivables
- Rating Emerging Market Trade Receivables Duff & Phelps
- An Overview of Credit Derivatives
Case
Studies and Deals
- Finance Company Bhd
- Korea Asset Funding 2000-1
- 6 Battery Road
- Phebus
- CAST
- Ford Credit Auto Owner Trust
- Singa Secured Assets Ltd
- High Yield Bond Trust
- Hong Kong Card
- Free Cash Flow Valuation Problem Set
- John M. Case Company
- Infox System GMBH
- Sealed Air Corporation's Leveraged Recapitalization A
- K-III: A Leveraged Build-Up
- EMAS -- After the LBO
- CCM -- The management buy-out of ICI Malaysia
- ASAT -- A Hong Kong LBO
- MANDO -- A Korean LBO
- The LBO of Seagate
- A Call to Guernsey
- DBS Pens
- Keppel T&T Convertible Bond
- Singapore Warrants
- Times Mirror Company PEPS Proposal Review
- Enron Corp. -- Credit Sensitive Notes
- Structured Finance: Opportunities in Singapore?
Workshop
Slides
Useful
Websites- Securitization
- ABSnet Many free resources plus a fee-based deal monitoring service
- Fitch Extensive materials on their rating methods as well as reports on deals
- Standard and Poors Extensive materials on their rating methods and deals
- Moodys Mostly deal reports
- Securitization.net A law firm's ABS website
- Asset Securitization Framework in Asia and Elsewhere Vinod Kothari
- globalsecuritization.com ABS seminars and resources compiled by Ian Giddy
- asiansecuritization.com ABS in Asia: resources compiled by Ian Giddy
- Leveraged Finance
- Financefixit.com Giddy's Corporate Financial Restructuring website
- Asiaventure Private equity in Asia
- Prof Aswath Damodaran's Home Page: http://www.stern.nyu.edu/~adamodar
- Prof Ian Giddy's M&A Page: financefixit.com
- Want to buy a business? mergernetwork.com
- Want to sell your business? dtonline.com
- Research Articles from McKinsey Quarterly: mckinseyquarterly.com
- Company data from Morningstar: morningstar.net
- Lots more company data from Dailystocks: dailystocks.com
Books
- The Art of M&A Financing and Refinancing by Alexandra Reed Lajoux and J Fred Weston, McGraw-Hill
- The New Financial Capitalism by George Baker and George David Smith, Cambridge
- Takeovers, Restructuring and Corporate Governance, by J Fred Weston et al., 2nd Edition, Prentice-Hall
- Damodaran on Valuation, by Aswath Damodaran, Wiley
- Valuation, by Thomas Copeland et al., Mc Kinsey, 2nd Edition
- Mergers & Acquisitions : Managing the Transaction Joseph C. Krallinger
- More books...
Background Materials
Background Materials on Corporate Finance may be found at the
following website:
http://giddy.org/ibmfinance/finmat.htm
Excel spreadsheets for Corporate Finance and Valuation may be
found at:
http://giddy.org/ibmfinance/spreadsheets.htm