- resources in finance

Institute of International Finance
Washington, DC

Global Corporate Finance & Structured Finance

Prof. Ian Giddy
New York University

Global Corporate Finance
In this module we review the key decisions -- investment, financing and risk management -- that contribute to shareholder value. Focusing on opportunities in today's global debt and equity markets, we provide guidelines for corporate funding choices and the value-added provided by investment bankers. Running through the key computations and concepts of corporate financing, we discover the how a acquisition financing choices or other restructuring can alter the value of a company -- for better or for worse. The module highlights the growing use of hybrid and mezzanine financing techniques in leveraged finance.

Structured Finance

This module offers an introduction to the exciting world of structured finance -- a $8+ trillion market. By their very nature, these instruments are designed to meet the special-situation needs of investors and issuers; hence they are ever-changing. Delegates will learn investors' and issuers motivations, and the pricing and risk aspects of the products. We'll illustrate the different classes of structured finance products with many current examples.




Morning Global Corporate Finance: Choices for Clients
  • Capital funding choices for global corporations
  • Computing funding costs and the cost of capital
  • Matching corporate finance to funding choices
  • Case study: Financing Photronics
  • How funding choices relate to shareholder value<>
  • Seeking the most effective capital structure
  • Case study: The proposed recapitalization of Oracle
  • A roadmap for capital structure choices in acquisition finance and recapitalizations

Mezzanine Finance
  • Leveraged finance: why and how
  • Mezzanine: beyond debt and equity
  • Assets versus cash flows as support for leverage
  • Second lien financing
  • Subordinated vendor financing
  • Pay-in-kind (PIK) notes
  • Warrant notes
  • Example: Woodstream. Who gets the warrants, and what are they worth?
  • Convertible notes and preferred stock
  • Case study: Advising on the ISS financing
  • Conclusion: exit strategies


Case Studies
Financing Photronics
The Leveraged Acquisition of ISS

Mezzanine Finance 1 &
Mezzanine Finance 2


Structured Finance: Introduction
  • Motivation and economics of structured finance
  • Examples of structured finance instruments in the global bond market
  • Credit risk transfer through securitization
  • Getting an asset-backed deal to market
  • Credit enhancement: how it works
  • Case study: Finance Company Bhd. Participants review the process, structure and cash flows of this deal
  • Key legal prerequisites of ABS today

Credit-Linked Structured Finance
  • Beyond ABS: Collateralized debt obligations and credit derivatives
  • Synthetic credit risk transfer
  • Structured products linked to loan markets and companies' credit perfomance
  • Credit-linked notes
  • Example: Chase Leveraged Loan Participation Note
Equity-Linked Instruments and Hybrid Securities
  • Why use equity-linked and hybrid instruments?
  • Background: equity derivatives
  • Convertible bonds and warrants
  • Case study: DBS PENS. In what way were these investments designed to attract foreign investors?
  • Capital-protected index-linked notes -- and variants
  • Case study: JP Morgan Equity-Index Linked Note
  • Option-linked products: equity bull and bear notes
  • Case study: RBC Bear ELNs
  • Hedging and managing the risk
  • Commodity-linked and currency-linked products
  • Hybrid bonds as a financing instrument
  • Case study: US Bancorp Hybrid. Is this debt or equity?
Review and Conclusion


Case Studies
Finance Co. Bhd
DBS Pens
Equity Index Note

Oil-Linked Notes
US Bancorp Hybrid

Structured Notes

About the Instructor
Dr. Ian Giddy, born in South Africa, has taught finance at NYU, Columbia, Wharton, Chicago and in over 40 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. | | | | contact
Copyright ©2006 Ian Giddy. All rights reserved.