Asian High-Yield Bonds

Course overview A new generation of Asian growth enterprises has taken advantage of global investor interest to raise long-term, non-dilutive capital in the high-yield bond market. This course looks at the emergence of the Asian high-yield sector, key issuance drivers and demand dynamics. It examines the intricacies of Asian high-yield bond structuring, interpretation of covenant packages, as well as documentation and execution aspects. The course also sheds light on successful and failed restructuring efforts of Asian high-yield bonds in various jurisdictions. You will learn the motivations behind issuing and investing in high-yield bonds. The course will familiarize you with key concepts, structuring aspects and covenant packages on Day 1. This will be followed by a comprehensive review of the new issuance process, encompassing due diligence and disclosure, documentation, marketing, bookbuilding, pricing and the credit ratings process on Day 2. An analysis of recent high-yield restructurings will introduce participants to the downside of high-yield investing and what recovery assumptions should be made. Summary of course content Current developments in high-yield bond markets in the US, Europe and Asia Key concepts, structuring issues and covenants Interpretation of covenant packages Offering structures, timetable and principal documentation Comprehensive evaluation of new issuance processes Detailed analysis of high-yield bond restructuring in various jurisdictions Liability management and implications for issuers and investors Who should attend? All fixed income professionals DCM originators Leveraged finance specialists Corporate finance functions Investment bankers CFOs and corporate treasurers Asset and hedge fund managers Private bankers Supporting publications:
Day 1 Welcome and introduction Definition of high-yield bonds Introduction to high-yield bonds High-yield vs. emerging market issuers Short history of the high-yield bond market Fact vs. Fiction Developments in the US Developments in Europe Asia's first generation high-yield market Asia's second generation high-yield market Asia's high-yield bond issuers and investors Supply drivers China's real estate boom Natural resources in demand Capex needs Demand drivers Liquidity factors Development of a high-yield investor base Asset managers and hedge funds Proprietary trading accounts Private banks Buy-side challenges Offering structure, timetable and principal documentation Changing capital structures Key concepts of high-yield bonds Structural, contractual and other types of subordination Typical offering structures for Asian high-yield bonds Security packages of high-yield bonds Guarantees Share pledges Cash waterfall structures Others Why us convents? Interpretation of high-yield bond covenants Limitation on indebtedness (FCCR ratio, permitted indebtedness, exceptions to ratio debt, permitted refinancing indebtedness) Limitation on restricted payments (permitted investment definition, ability to make minority investments, pay dividends) Limitation on dividends and other payment restrictions affecting restricted subsidiaries Limitation on sales and issuances of capital stock in restricted subsidiaries Limitation on issuances of guarantees by restricted subsidiaries Limitation on transactions with shareholders and affiliates Limitation on liens Limitation on sale and leaseback transactions Limitation on asset sales Limitation on the company's business activities Early redemption options Non call features Change of control put Equity clawback Day 2 The offering and credit ratings processes Sample timetable Selection of bookrunners Disclosure and documentation of high-yield bonds Due diligence and disclosure process The Offering Memorandum Financial statements and financial information Marketing and roadshow The bookbuilding procedure Technical and environmental pricing variables Credit ratings seniority Callability Zero coupon status Issue size Issuer status Relative value Default rates Equity valuations Competing supply Mutual fund flows Industry category Management presentation Issue stricture Ability to foreclose on collateral The credit ratings process Credit ratings basics Rating agency considerations Key risks of high-yield bonds The downside: High-yield bond restructuring in Asia Corporate defaults and recovery Insolvency regimes in Asia Recovery value comparison Liability management / restructuring options Case studies: What works and what doesn't? Implications for corporate issuers and investors The Asian high-yield private placement market Structures Issuance drivers Issuance procedure Attractions for investors Outlook and closing remarks