Singapore Institute of Management

Issues in Global Corporate Financing

  • Managing Corporate Financial Health
  • Corporate Financial Restructuring
  • Techniques for Financing Growth
  • Financial Risk Management
  • Valuing a Business
  • Mergers and Acquisitions
Background Materials on Corporate Finance

Related websites:

Prof Altman's web page

Advanced Strategic
Financial Management

Analytical Tools, Strategic Planning and Restructuring Guidelines
 for Senior Financial Managers

 Prof. Ian Giddy and Prof. Edward Altman
New York University,
Stern School of Business

The world economy is readjusting. Asia's leading corporations are under pressure from competitors and shareholders at home and abroad. CFOs face new challenges. What can they learn from the crisis, from the technology boom and from the altered climate in financial markets? How can they respond effectively to the new economy, capital market changes, and imminent corporate restructuring?

In this seminar, Professors Altman and Giddy draw on leading-edge academic analysis and decades of financial market experience to bring you a unique insight into how to manage a successful financial function in companies facing financial or business risks that limit their access to capital markets.

You'll learn how to gauge a company's vulnerability to market risk, and how to design the financing mix accordingly. Using spreadsheet-based exercises, as well as established and tailor-made financial models to Asian emerging markets, you'll attempt valuation of new, old and merging companies. You'll walk through new-venture financing and funding techniques for companies such as some telecoms entities whose financial stength has deteriorated. Hands-on case studies and applications to participants' companies will provide a practical view of hedging techniques, hybrid financings, asset-backed securities, leveraged buyouts and other forms of acquisitions and divestitures, and the measurement and management of credit risk. You'll emerge a more capable financial executive, able to manage in both positive and stressful financial climates.

Course Outline

Day 1

Corporate Finance
Prof Edward Altman
  • Finance and the Corporation: Planning a Firm’s Capital Structure
  • Achieving Company Goals in a World of Uncertainty
  • Importance of cash flows and valuation
  • Fundamentals of risk analysis
  • Company-Bank Relationship: The Credit Risk Factor
  • A Primer on Credit Risk Management
  • Assessing a Firm’s Strengths and Weaknesses
  • Traditional financial statement analysis
  • Non-traditional statistical techniques
Managing Corporate Financial Health

    Prof Edward Altman
  • Predicting Financial Health of Emerging Market Companies
    • Predicting and Avoiding CorporateDistress: The Z-Score Models
    • Other Forecasting Models
    • Application to Southeast Asian Firms: Models for Singapore, Malaysia, Thailand and Indonesia
  • Financial Forecasting and Managing Credit Risk: A Case Study
  • Assessing the current health of the firm
  • Firm-bank relations
  • Break-out syndicates -- work on company
  • case studies
  • Discussion of company case studies
Note: Attendees should bring the latest financial statements of their company, and a company they are interested in, to the seminar. Financial calculators or laptops are
also required of all attendees. Try to concentrate on non-financial entities, especially manufacturers.

Day 2

Managing a Financial Turnaround

Prof Edward Altman
  • Continue work on company case study
  • Managing a Financial Turnaround
  • Lessons for successful and unsuccessful firms
  • Discussion of Credit Risk case

Financial Restructuring and Capital Structure

Prof Edward Altman
  • Revisiting Asian corporate financial health (application to attendee companies)
  • Corporate Restructuring
    • Asset and liability reorganisation
    • Potential for success and failure
    • Introducing the leverage restructured firm
    • Valuing the private firm
    • Management and leveraged buyouts
    • Lessons from the 1980’s
  • Linking Financial Theory and Practice
    • Capital structure theory and practice
    • A recipe for the successful leveraged restructuring
    • Distressed restructuring for Asian firms
    • Lessons from abroad
    • The role of the high yield debt markets and distressed investors
Day 3

Corporate Financing Principles

Prof Ian Giddy
  • Financing the corporate life cycle
    • Measuring the cost of equity
    • Measuring the effective cost of debt
    • Measuring and optimising the overall cost of capital
Corporate Financing Techniques 

Prof Ian Giddy
  • Sources of Equity for Growing Companies
    • Pre-IPO financing
    • Seed capital/Angel money
    • Private Equity
    • Venture Capital
    • Strategic partnerships/joint ventures
  • Recapitalisation: The Asian Challenge
    • Debt/equity swaps with lenders
    • When and why they apply
    • How to structure them
    • Restricted-rights share offerings
    • Minority share issues
    • Takeovers by domestic or foreign companies
  • Sources of New Debt
    • Advantages and disadvantages of bank debt
    • Growing domestic bond markets
    • Eurobond and foreign bond markets
    • Private placements
  • Measuring the effective cost of financing
  • A roadmap for financing choices
Risk Management
Prof Ian Giddy
  • Managing Financial Risk and Designing Debt
    • Measuring and managing financial risks such as currency or interest rate fluctuations
    • Tools such as sensitivity analysis and value at risk (VAR)
    • Economic exposure to market risks
    • Control exposure to market risk and build "financial resiliency"
  • Use of debt and derivatives to reduce availability risk, interest rate risk and currency exposure
    • Debt design and market risks
    • Long term vs short term
    • Fixed vs floating
    • Currency of denomination
  • Reconfigure existing debt with derivatives
  • Futures, forwards, swaps and options
  • A roadmap for corporate exposure diagnostics and debt design

Day 4

Structured Finance: Hybrid and Asset-Backed Securities

    Prof Ian Giddy

  • Hybrid and Quasi-equity Financings
    • Quasi-equity debt financing such as warrants or convertibles
    • When is a specially structured hybrid security the best solution?
    • How do indexed securities work and what are the three key reasons that companies use them?
    • Who uses commodity-linked bonds and why?
    • How are hybrids valued and priced?
  • Swap Financing Techniques
    • The mechanics of financing with interest rate and currency swaps
    • The all-in cost of swapped debt
    • Using and pricing caps, collars, and swaptions
  • Asset-Based Financing Techniques
    • Mechanics of asset-backed securitisation
    • How asset securitisation can give access to new sources of funds
    • Cost-benefit analysis
    • Legal, tax, accounting and regulatory issues
    • Application to South-East Asia
Day 5

Valuation of the Business
    Prof Ian Giddy
  • Princlples of valuation
  • Asset-based methods
  • Comparables and ratios
  • Discounted present value methods
  • Understanding valuation of free cash flow
  • Hands-on applications of valuation techniques
  • Application of alternative valuation methods such as asset values, comparables and discounted present value
    • Value of acquiring a strategic option to pre-empt competitors
    • Value of key assets, such as a franchise, management and employee teams and/or a customer base
  • Application to stable-growth companies
  • Application to high-growth, high-risk companies
  • Applications in South-East Asia
Mergers, Acquisitions, and Divestitures

    Prof Ian Giddy
  • Mergers and Acquisitions
    • Why some succeed and many fail
    • Who gains? Who loses?
    • How to pay and how much to pay?
    • Role of divestitures and LBOs
    • In-depth case study
  • Corporate Valuation in Mergers, Acquisitions, Divestitures and Ownership Restructurings
    • How to estimate the value of an acquisition target
    • Stand-alone value
    • Value with prospective synergies
    • Added value from obtaining management control and/or ownership
  • Creating Post-merger Value
    • Top-line synergies such as cross-selling and gaining market power
    • Bottom-line synergies such as economies of scale
    • Corporate restructuring such as divestitures
    • Financial engineering such as improving the capital structure
    An Integrated Framework for Creating Corporate Value from the CFO’s Standpoint
  • Recap of the Seminar

Prof Giddy's Schedule and Readings:

Date and Time Topic Cases and Readings

09:00 Introduction
Finance and the Corporation: Planning a Firm's Financial Structure
Notes on cost of capital and capital structure
Sealed Air's Financing
10:30 Break
10:45 Sources of New Equity and Debt  Venture Capital
Cache Flow
Siam Commercial Bank
12:30 Lunch
13:30 Managing Financial Risk and Designing Debt The Management of Foreign Exchange Risk
The Corporate Hedging Process
15:15 Break
15:45 Managing Financial Risk and Designing Debt (cont.) IAS 39 - What Do Companies Have to Consider?
Ban Pu Coal Company and Exhibits

09:00 Structured Finance
Hybrid Instruments
A Day in the Life
Ban Pu Convertible Bond
10:30 Break
10:45 Financing with Hybrid Securities and Swaps
Le Meridien
12:30 Lunch
13:30 Financing with Asset-Backed Securities Securitization 101
Finance Company Limited
15:15 Break
15:45 Corporate Valuation Techniques
Methods of Corporate Valuation
Valuing IBM
IBM spreadsheet
Option valuation of a company

09:00 Corporate Valuation Applications
Tristate spreadsheet
Optika-Schirnding merger spreadsheet
10:30 Break
10:45 Mergers and Acquisitions: Value Creation or Value Destruction? Ciba's Acquisition of Allied Colloids - Part 1
Part 2
12:30 Lunch
Corporate Valuation in Mergers, Acquisitions, Divestitures and Ownership Restructurings Feng-Shui Compass Company
Ipoh-Kelantan spreadsheet

Financing Mergers and Management Buyouts
The LBO of Plato Data
platodata spreadsheet
Debt Capacity Tables

Monster Garage
Monster garage spreadsheet

Background Materials
Background Materials on Corporate Finance may be found at the following website:
Excel spreadsheets for Corporate Finance and Valuation may be found at:
A sample Excel spreadsheet for the valuation of a merged company may be found at:

Professor Altman’s Articles can be found in Attendee Packet and his website at: | | | | contact
Copyright ©2004 Ian Giddy. All rights reserved.