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Instructor
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 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.
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Money & Credit
This module takes an
inside look at
commercial
banking in a time of transition. Which banks can make money, and how
do they provide and price credit? Starting with the basic economics of the characteristics of
banks that
make them special and subject to specific regulations such as capital
requirements, the instructor explores the past and future competitive
pressures
that are driving the transformation, consolidation and even collapse of
many
banks at home and abroad. These
pressures include the incursion of investment banks into commercial
banks'
domain, and vice-versa; the ability of banks' corporate clients to
raise
multicurrency, multimarket debt; the Euro phenomenon; the unbundling of
credit
risk; and the increasing importance of leveraged lending and equity or
quasi-equity financing in M&A activities. The growth of
asset-backed
securities and other forms of off-balance sheet financing, including
project
finance, is accorded special treatment.
Course Outline
Day 1
- Commercial
Banking in a Time of Transition (2 hours)
- Banks
vs. Markets
- Deposits,
Reserves and the Fed
- Moving
Money – Domestic and International
- The
Eurocurrency Market
- Bank
Risk, Bank Capital
- Why
Regulate Capital?
- “Value
at Risk”
- Banks and Credit (2 hours)
- Asset/Liability
Management
- Loan
Pricing—Basis and Margin
- Transferability
of Loans: Off-Balance-Sheet Banking
- Unbundling
of Loan Features
- Leveraged
Lending and Acquisition Financing
- Lending vs Distribution and Underwriting: How Banks Make Money
- Case Study: Structuring and underwriting a syndicated loan for acquisition financing
Day 2
- Asset-Backed
Financing (2 hours)
- Commercial
Banks and Securitization
- The
Process: Example of Typical Structure and Cash Flows
- Legal
Prerequisites: Bankruptcy Remote, no or Limited Recourse to Sponsor
- Accounting
Prerequisites: Sale for Accounting Purposes, FAS 140
- Tax
Prerequisites
- The
Impact of Basel II on Bank Capital and the ABS Technique
- Focus
on CLOs and CBOs
- Focus
on Asset-Backed Commercial Paper
- The
Rating Process and Credit Enhancement
- Project
Financing and Future-Flow ABS (2 hours)
- Non-Recourse
Structures
- Contractual
Roles of Sponsor and Other Participants
- Sources
of Funding
- In-depth
Case Study
- Dealing
with Currency, Transfer and Sovereign Risk, and the Securitization of
Future-Flow Receivables
A
Roadmap for Corporate Finance
This
module offers an overview of finance from the perspective of the
corporate financial
manager. Beginning with the premise that the goal of management is to
increase
the value of the firm, participants will walk through the key decisions
--
investment, financing, and risk management -- that contribute to
shareholder
value. The investment side will include
portfolio selection and management decisions, capital budgeting under
risk, and
M&A.
The
financing side comprises
decisions about capital structure -- how much debt, relative to equity
is
optimal for a particular firm, including regulated financial
institutions -- as
well as decisions about what kind of debt, and what kind of equity, is
right
for the firm. Both investment and
financing decisions are tied to financial risk management, including
the choice
of hedging instruments. The third leg
will therefore offer insights into how corporations measure and manage
interest
rate and currency risk, and which instruments best suit their purposes.
Course Outline
Day 1
- The Corporate Finance Roadmap (2 hours)
- Investment, Financing and Risk Management
- Managers' vs. Owners' Interests: Corporate Governance and
Incentive Issues
- A Company in Nutshell
- Corporate Performance Metrics
- Corporate Valuation Drivers
- Principles of Corporate Investment Decisions (2 hours)
- Financial Investments
- Principles of Portfolio Management
- Capital Investments
- Mergers, Acquisitions and Divestitures
- Case Studies: Acquisition and Divestiture Analysis
Day 2
- Principles of Corporate Financing (2 hours)
- Corporate Financing Decisions in Theory and Practice
- Finding the Optimal Capital Structure: Debt, Equity or
Mezzanine?
- Corporate Taxation and Capital Structure
- Financing and Corporate Volatility
- Principles of Corporate Financing: Debt Structure (1 hour)
- From "How Much Debt?" to "What Kind of Debt?"
- Public vs. Private; Long Term vs. Short term; Fixed vs Floating
- Corporate Financial Risk Management (1 hour)
- When Should Companies Actively Hedge Financial Risk?
- Defining and Measuring Financial Risk
- Tools and Techniques: Derivatives Such as Futures Options and
Swaps
- What Can Go Wrong and Why?
Presentation Slides
Case Studies
Money & Credit
Corporate Finance
Articles
Money & Credit
Corporate Finance
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