Structuring Leverage & Mezzanine Finance - New York City

Structuring Leverage & Mezzanine Finance - New York City

Euromoney Training
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Description

The course will use real life case studies and examples of transactions to develop participants' understanding of the techniques being discussed. Most of the case studies are designed to encourage delegates to think more closely about the issues involved and discuss them as a group. Some case studies will require participants to bring laptops to manipulate Excel spreadsheets. The course is designed to improve the participants' skills in acquisition analysis, structuring and valuation. Many examples will be provided to illustrate the key principles and to develop participants' understanding of real-life applications. This 3-Day Intensive Program Featuring: How leverage facilitates the achieve…

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The course will use real life case studies and examples of transactions to develop participants' understanding of the techniques being discussed. Most of the case studies are designed to encourage delegates to think more closely about the issues involved and discuss them as a group. Some case studies will require participants to bring laptops to manipulate Excel spreadsheets. The course is designed to improve the participants' skills in acquisition analysis, structuring and valuation. Many examples will be provided to illustrate the key principles and to develop participants' understanding of real-life applications. This 3-Day Intensive Program Featuring: How leverage facilitates the achievement of corporate objectives Using leverage to lower the weighted average cost of capital (WACC) Multiple based valuation Valuation triangulation LBO structuring Different types of leveraged transaction Other hybrid instruments: convertibles, structured products Restructuring Second lien financing Mezzanine and non-senior debt financing Changes to covenant structures post-credit crunch Who Should Attend? Head of Retail Banking Regional Managers Branch Managers General Managers Head of Marketing Distribution Managers Strategic Planning Personnel Operations Directors
Day 1 LBO STRUCTURING Introduction to Mezzanine instruments Financial analysis: producing pro forma projections Establishing the amount of debt that can be used Assessing the type of debt that can be used Computing the blended cost of capital Disadvantages of the high level of gearing CASE STUDY:International acquisition using bridge financing Leveraged buy-outs Different types of transaction: LBO, MBO, MBI, BIMBO, IBO, LBU, P2P, etc. Acquisitions suitable for leveraged finance Deal structuring: equity and debt (including senior and mezzanine debt) Refinancing with bonds or other capital instruments post acquisition The leveraged buy-out process CASE STUDY:A large multinational LBO Secondary buy-outs (SBOs) Structure Financial economics Management participation The envy ratio Exit strategies CASE STUDY:Building materials group buy-out of a buy-out Restructuring as a strategic option The theory Impact on incentives Mechanics: share buyback or special dividend The benefits Leveraged recap to release value for owners Leveraged recap as a defensive strategy CASE STUDY: M&B refinancing Day 2 CREDIT RATIOS IN LBO DEALS Mezzanine finance structures Key ratios determining the financing structure Preparing projections for the appraisal of an LBO and mezzanine opportunity Likely changes in loan covenants after the credit crunch Mezzanine in structure products (such as securitized debt) Using Monte Carlo simulation to simulate credit scenarios Non-bank financial institutions (structured investment vehicles – SIVs) CASE STUDY: Whole business securitization Second lien financing Definition Providers Security arrangements CASE STUDY:Second lien financing in an LBO Mezzanine and non-senior debt financing Senior versus non-senior debt Mezzanine debt capacity Cost of mezzanine Using warrants to deliver value to lenders Subordination: structural and contractual CASE STUDY:Inter creditor agreements in an LBO Other mezzanine financing instruments: hybrids, convertibles PIK notes +/- warrants Cost of finance Subordinated debt High yield debt Convertibles Hybrid securities Restrictions, covenant structures CASE STUDY:High yield bond issue Day 3 DISTRESS AND RESTRUCTURING The road to financial distress Symptoms of distress Causes of distress The cycle of distress The role of covenants as early warning devices The rating agencies and missed problems Distressed security prices Systemic distress or ad hoc distress Speed of recognition versus management denial CASE STUDY: Americredit and the US car industry Business plan failures Critical assumption failure causing distress Technological failure The Iridium case Revenue failure Project financing failures CASE STUDY:Channel Tunnel restructuring Pre-distress restructuring actions Management led business restructuring ahead of distress Cutting costs to meet a lower level of business activity Financial restructuring ahead of projected or possible distress The distressed debt investor’s approach to selecting distress candidates CASE STUDY: Raising equity for a major property company (Hammerson) before covenant breaches cause financial distress Restructuring options What business levels can be projected in the future Can the projections support the current debt burden? Does the company need more cash to execute the new plan? Approaches to insolvency (INSOL Principles) Workouts Prepackaged deals Court led/judicial restructurings Comparing international approaches CASE STUDY:Parmalat and the Marzano Law
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