Finance for Lawyers
Starting dates and places
DescriptionThe objective of this program is to increase participants' understanding of the perspective of a corporate financial manager and his/her relationship(s) with investment bankers and other securities professionals. Against this backdrop, the course addresses the interlocking roles of financial and legal professionals in crafting the instruments in which corporations invest, in bringing them to the marketplace to issue debt and equity and in assisting companies in managing financial risk. Participants will be provided with a complete workbook of lectures, case studies, worked examples and selected readings which will serve as a valuable reference guide after the program is completed. These mate…
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DAY 1 Introduction and Overview Corporate financing alternatives and objectives today Changes in the financial markets: a plethora of choices The changing roles of banks and securities firms Debt Fundamentals: Yields Measuring return on debt instruments: US Treasury securities Monetary policy: a primer Short and Medium Term Financing Alternatives Bank loans/syndicated financing US and Euro-commercial paper Asset-Backed Securities Choosing a special purpose vehicle Establishing that a security is bankruptcy remote Securitizing credit card receivables through commercial paper issuance Intermediate and Long Term Financing Alternatives Publicly traded securities - Corporate bonds - Junk bonds Bringing a deal to the market Medium term notes Eurobonds Private placements (rule 144A) Leveraged leasing DAY 2 Equity Markets Determining stock price: valuing companies Mechanics of an Initial Public Offering Types of common and preferred stock ADRs and ADSs Debt-Equity Hybrids Convertible debt and debt with warrants Conversion premiums and interest rate/dividend yields When does exercise occur? Bringing a Deal to Market Guest Speaker: Peter Darrow, Partner, Mayer, Brown, Rowe & Maw Overview of procedural and legal issues applicable to the sale of securities in the international capital markets Participants in the offering Due diligence and preparation of the offering circular Financial and practical issues (e.g. Form of securities, clearance and settlement, listing) Documentation Equity securities Suggested time lines The impact of the Sarbanes-Oxley Act 2002 and other governance initiatives Using Derivatives to Transform Risk: Swaps Development of the swap market Comparative advantage Swaps and parallel loans Swap applications Terminology and quoting conventions Pricing Swaps Term structure of interest rates/ implied forward rates a string of FRAs Default risk of swaps and other credit factors Marking to market and swap buyouts Asset Swaps and Structured Notes Altering the risk and return of investments with asset swaps Interest rate sensitive coupons Variable principal structures Cross-Currency Swaps Development of the currency swap market Risk characteristics of currency swaps DAY 3 Using Options Caps, floors and collars Option pricing considerations Options in combination with swaps Credit Derivatives Hedging against credit downgrade or loss Credit forwards Default swaps, total return swaps Credit put options Framework and Tools of Credit Analysis Outlining the approach - Credit basis and source of repayment - Impact on risk assessment of facility structuring Considering country risk Reading industry trends and financial features of an industry Industry peer groups Issuer Specific Financial Analysis Evaluating financial statement quality Assessing financial risks - Ratio norms/shortcomings - Constructing and interpreting cash flow statements Mechanics for Forecasting Future Performance Capital structure Financial leverage and debt capacity Acquisition Finance Leveraged acquisitions Players and rationale Arranging co-financing The shape of high yield debt Case Study: Highly Leveraged IssuerParticipants will break into groups to discuss an appropriate financial structure for a company based upon cashflow forecasts and sensitivity analysis. Focus is on the risks of the transaction posed to the investor.