Course Overview

This course will provide participants with a thorough overview of the role of debt finance in corporate finance transactions.

It covers a wide variety of debt financing instruments ranging including bank loan structures, mezzanine finance, bond issues and the growing importance of the application of asset backed securities.

The rating process is also covered as are “credit enhancement” mechanisms. The course also includes a review of risk mitigation techniques.

Course Content

 Overview of Types of Corporate Funding
Equity
Debt - short and long term funding instruments
Quasi debt instruments - mezzanine finance
Bank loan structures
Corporate financing decisions and use of debt finance

 Debt Financing in Mergers and Acquisitions
Capital market efficiency theory
Capital structure theory
Debt financing management

 High Yield Corporate Bonds

 Credit Derivative Products

 Rationale for Securitisation

 Fundamental ABS Structures
Mortgage backed deal structures
Commercial loan and bond collateralised deals
Auto loans
Credit cards
Leasing
Future flow transactions

 The Rating Process
Importance of the rating agency involvement
The rating process for typical CNBs, RMBs and CDOs
Rating methodologies and formulas
Risk transformation through credit enhancement

 Credit Enhancement
Importance of credit enhancement structures
Bank guarantees and letters of credit
Guaranteed investment contracts
Debt subordination
Over collateralisation
Excess spread accounts

 Risk Mitigation
Credit risks
Liquidity risk
Market risks - interest and currency
Reinvestment risk
Administration risk
Legal and tax risk