About
the Course
Corporate
financial restructuring involves any substantial change in a company’s
financial structure, or ownership or control, or business portfolio,
designed to increase the value of the firm. This 3-day
intensive course will be taught around several
major topics employing in-depth group work on case studies and deal
documentation. The focus will be on identifying situations that call
for nonstandard corporate finance solutions, and the design and pricing
of the situation-specific financing instruments. Examples of such
situations include stress-induced financial restructuring,
recapitalizations, private equity and leveraged buyouts, acquisitions
and divestitures, and post-bankruptcy reorganizations. In many cases
resolving these issues will require the
design of debt, equity and hybrid financing techniques in order to
resolve particular issuer or investor problems that cannot be solved by
conventional methods.
Who
Should Attend?
The course is of relevance to corporate finance officers, to
lenders and investors in corporate paper, and to those involved in
buyouts and restructurings. This includes corporate officers,
commercial and investment bankers, securities analysts, private equity
specialists, asset managers, and other individuals whose professional
future may be enhanced by an understanding of restructuring techniques.
Materials
Participants
will be provided with a package of materials useful to the analysis and
design of corporate financial restructuring techniques, including
pertinent articles, rating agency reports and sample documentation from
actual deals done in North America, Europe and elsewhere.
Course Outline
Topics
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Resources
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Day
1
- The Restructuring
Framework
- Proactive
- Defensive
- Distress
- Restructuring Debt
and Equity to Create Corporate Value
- The
five principles of corporate financial restructuring: Investments, acquisitions,
financing,
payback and risk management
- Managers’
vs shareholders’ vs lenders' interests: the agency problem
- A
Roadmap for Restructuring Choices
- Leveraging and
Deleveraging
- Establishing required
rates of return
- Adjusting the costs of debt and
equity for leverage
- Corporate taxation and capital structure
- Leverage optimization
through
WACC simulation
- Cost of capital and
capital structure
- Dividend recaps,
equity buybacks, debt buybacks
- Leveraged
Buyouts: The Basic Economics
- What makes
a business suitable for a buyout?
- LBO entry, paydown
and exit valuation
- Group
Assignment: debt capacity analysis
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Presentations
TBA
Case studies
TBA
Articles
TBA
Spreadsheets
TBA
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Day
2
- Leveraged
Buyout Financing Instruments
- Parties to a typical
deal: seller, management, private equity house, bankers, mezzanine
investors
- The multi-tier
financing structure
- Senior
Loans in Leveraged Finance
- Senior-sub
structure in leveraged finance
- Secured
debt: what
collateral? what
pricing? what amortization?
- A/B/C
loans
- Sale-and-leaseback
financing
- Mezzanine
Financing Instruments
- Second
lien notes
- Pay-in-Kind
notes
- Mezzanine
notes: warrants, and other variations
- Vendor
finance and earnouts
- Participation
mezzanine: payouts linked to EBITDA or performance
- Refinancing,
Recapitalization and Exit
- Pricing the leveraged cost of
capital
- Debt repayment
- Debt paydown through registered
placements and disposals
- Post-acquisition
refinancing
- Leveraged
recapitalizations and partial exit
- Business Portfolio Restructuing:
Acquisitions and Divestitures
- Mergers and acquisitions: when do they
make sense?
- Acquisition analysis: the four sources of
acquisition gains
- Post-acquisition divestitures
- Measuring and managing break-up value
- Taxable and tax-free corporate breakups
- Before-and-after divestiture analysis
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Presentations
TBA
Case studies
TBA
Articles
TBA
Spreadsheets
TBA
|
Day 3
- Financial
Distress and Restructuring
- Leveraged
buyouts gone wrong: restructuring the pricing and terms
- Debt buybacks
- Stressed restructurings
- Workouts
- Match
the Solution to the Problem
- The
financing is bad: recapitalize equity, debt-equity swap, sell assets,
restructure debt
- The
business mix is bad: sell businesses
- The
company is badly managed: change of control and/or ownership
- Bankrutpcy and Reorganization
- Liquidation, sale, or debt restructuring?
- Negotiated settlement vs merger vs legal reorganization
- Role of vulture investors
- Debtor-in-possession financing
- Allocation of liquidation proceeds
- Post-banckruptcy reorganization
- Valuation of a Company in Distress
- Group
work on valuation and restructuring a company's balance sheet
- Review of the
Restructuring Roadmap
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Presentations
TBA
Case studies
TBA
Articles
TBA
Spreadsheets
TBA
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Additional Resources
Articles
and
Books
Notes
on cost of
capital
and capital
structure
Second
Lien Loans
Mezzanine
Finance 1
Mezzanine
Finance 2
Subordinated
notes term sheet
Useful Links
fitchratings.com (bond
ratings)
bondsonline.com (corporate bond
spreads)
damodaran.com
(industry ratios)
advfn.com (corporate financial ratios)
Corporate
Finance and Debt
Capacity Tables
agi_lbo_solution.xls
iss_solution.xls
financing_suriname_solution.xls
jordan_lbo_model_soln.xls
foodtree_solution.xls
About the Instructor
Dr. Ian
Giddy,
born in South Africa, has taught finance at NYU, Columbia, Wharton,
Chicago and
in over 45 countries worldwide for the past three 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
North and South America, Europe, Asia, the Middle East and Africa. As a
banker and consultant he has been involved in the
growth of the structured finance market in the USA, Europe and Asia. 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. He and his wife are
the founders of Cloudbridge, a nature reserve in Costa Rica.
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