The New York School of Corporate Finance

The course begins with a detailed look at the principles of corporate valuation and credit analysis – the necessary building blocks before actual financing takes place. Delegates will explore the most widely used valuation approaches, with particular emphasis on how to use ratios as an indicator of financial strength and weakness. Next, we’ll consider debt financing alternatives beyond straight bond issuance. As companies try to maximize value, the optimal capital structure can often only be achieved through restructuring, recapitalization or acquisition of a competitor or peer. The group will look at the advantages and disadvantages of each approach. On the third day, delegates will work through the equity financing process. Following an overview of today’s equity markets, we will trace the issuance process from private equity to IPO, as well as explore secondary offerings including rights issues and repurchases. Finally, we’ll consider off-balance sheet and other alternative solutions to raising capital most widely employed by corporations. A special emphasis will be placed on securitization – does this process add value? In this 4 day course you will learn: Day 1: Principles of Corporate Finance Fundamentals of corporate valuation Comparable companies analysis Assessing debt capacity Credit and ratio analysis Day 2: Debt Financing Mergers & acquisitions Corporate restructuring Recapitalization Day 3: Equity Financing: IPOs and the Private Equity Market Understanding equity capital markets The IPO process The role of private equities Day 4: Leveraged Buyouts & Other Corporate Financings Financing LBOs: leveraged loans and mezzanine capital Syndicated loans The high yield debt market Securitization and other off-balance sheet solutions What you will need for the course Laptops are required as delegates will be required to value companies and model several transactions. One or more “Master Cases” will be used throughout the seminar to exemplify course concepts, and several more actual cases and examples will be employed to make the sessions as practical as possible.
Day 1 Principles of Corporate Finance Fundamentals of Corporate Valuation Capital structuring principles Asset pricing models including CAPM and APT Weighted Average Cost of Capital Maximizing Shareholder Value (SHV) concepts Identifying the “value drivers” Measuring corporate performance: DuPont analysis, EVA Discounted Cash Flow Valuation Estimating growth rates Determining cash flows DDM models Free cash flow models Case Study: DCF Valuation Participants will be divided into groups to analyze one of two companies. This case will be referred to as the “Master case”. In Part I, delegates will compute the cost of capital for their company and develop a discounted cash flow valuation using several methods discussed during the sessions Relative Valuation Comparable companies analysis Industry analysis Enterprise value multiples Using multiples to construct a valuation Master Case Study: Relative Valuation Teams will incorporate multiples and industry analyses to develop relative valuations for their Master Case companies Financial Modeling Techniques Information sources (and how to get them!) Types of financial models -Equity research (earnings projections) models -Financing (discount cash flow) models -Valuation models -M&A models LBO models Case Study: Comparable Companies Modeling Groups will develop a DCF valuation for a potential target acquisition company TBD and answer several questions including: Is the target company under/over/fairly valued? How do the company’s debt and equity ratios compare to market competitors? Day 2 Debt Financing Debt Capacity Important multiples to use Latest trends and market developments Rating agency criteria Mini-case: KPN NV Case Study: Debt Capacity Participants will now develop a standalone model to analyze the debt capacity of their company. Questions to be addressed and presented the next morning include: Does the Company have additional capacity to fund future acquisitions with debt? What other changes to assumptions/drivers can be implemented to give the Company additional debt capacity? What other significant trends or factors can you conclude from this standalone analysis? Mergers & Acquisitions Review of rating agency ratios and criteria Types of mergers Definitions and commonly used terms Acquisition strategies and motivations Master Case Study: M&A Groups will develop a relative valuation of the “master case” company previously assigned. Questions to consider: What premium can the Company pay for “Target” for an all-debt acquisition? Using the comparables analysis, does the acquisition make sense given where other companies in the industry are valued by the market? Explain. How should the Company structure the debt for the transaction? What debt multiple do you think will be acceptable to the market for the Company post-acquisition? Corporate Restructuring Divestitures, spin-offs, split-offs and split-ups Equity carve-outs Other asset disposals Case Study: Recapitalization The parent company of a subsidiary is looking to recapitalize the company with outside equity. Groups will: Analyze management’s primary objectives and concerns Discuss the implications of the corporate life cycle and business cycle Estimate the present bond rating to develop debt alternatives Calculate pro forma earnings-per-share for available debt alternatives Recommend the best refinancing alternative Day 3 Equity Financing: IPOs and the Private Equity Market Equity Financing Types of equity offerings The issuer’s perspective The capital structure decision: when to issue equity Initial Public Offerings The complete IPO process Current market conditions IPO spin-offs International considerations including GDRs and ADRs Private placements Case Study: Recent IPO TBD Delegates will explore the motivations behind a recent IPO and discuss whether the purchase price represented fair value Rights Offerings and Share Repurchases Structural advantages and disadvantages Deal terms – timeline and value Squeezeouts Preferred Equity Capital structure considerations Offering profiles Preferred dividends Synthetic structures Exercise: Evaluating Financing Alternatives In this section, we will review all of the financing alternatives discussed during the past two days involving debt and equity placement and consider several recent corporate financings. The pros and cons of each alternative will be debated. The Role of Private Equity Today’s private equity marketplace Leverage considerations Investment time frames and hurdle rates Role of development capital, venture capital, and other pre-IPO financing PE valuation using earnings, EBIT and EBITDA multiples Exit valuations and IRR Case Study: The Private Equity Sponsor Participants will examine the private equity financing component for a recent buyout. What premium did the buyer pay? Using the comparables analysis, does the acquisition make sense given where the market values other companies in the industry? Explain. What exit strategies should be considered? What debt multiple do you think will be acceptable to the market for the Company post-acquisition? Day 4 Leveraged Buyouts & Off-Balance Sheet Solutions Leveraged Transactions Recent developments in leveraged lending Leveraged buyouts (LBOs) Capital structure issues The junk bond market Example transactions Mezzanine Financing Optimizing the capital structure for an LBO Warrants and their usage Convertible notes and preference shares Subordinated debt Second lien financing Support for the deals- assets values versus cash flows Case Study: Evaluating a Leveraged Buyout Participants will be given background material about a privately-owned company and assess whether an LBO makes sense given market conditions and pricing information. The Syndicated Loan Market The syndicated loan process Types of loans and credit facilities Differences between regional leveraged loan markets Case Study: Financing the LBO Groups will consider alternatives to finance a recent buyout and prepare an analysis of the advantages and disadvantages of different structures The Securitization Process Cost-of-capital implications Bankruptcy-remote SPVs Credit enhancement methodologies and issues New structures and issues Exercise: Securitization Fundamentals Participants will examine a company before and after assets on the balance sheet are securitized to examine the effects of this financing Course Review & Conclusions