Dates                                                                  

29 October 2008
25 June 2009
24 September 2009

 Course Overview


Sale/leaseback arrangements – whereby a firm sells part or all of its property holdings and enters into a long-term net lease with its new owner – remain highly popular instrument through which businesses can cash in on their property assets.

These deals have been accelerating as property assets are increasingly perceived as decisive instruments in corporate valuation and strategy.

Through a range of detailed case studies, financial models and presentations from the standpoint of both corporate vendors and investors, this course reviews the process from start to finish.

It includes a detailed analysis of the assessment criteria, the benefits and the pitfalls of undertaking this complex decision.

Participants are required to bring a laptop with a USB Port to the course.

 

 Course Content

What is sale and leaseback?
Purpose
Structure
Results
History
Current Use
Statistics

 Case Studies: Le Meredien Hotels, Kingfisher, Tesco, Travelodge, IBM

Why use sale and leaseback?
Cost of capital
Comparative cost-benefit techniques
Risk management issues
Investor perceptions
Impact on the balance sheet
Legal structures (eg limited partnerships)
Disadvantages of sale and leaseback techniques for vendors
The position of the investor

 Case Study: International Accounting Standards and sale and leaseback

Assessment criteria
Role of discounted cash flow
Alternative methods
Optionality and sale and leaseback
Importance of forecasting
Risk assessment

 Case Study: Hotel investment models

OpCo and PropCo
What is the structure
Why is it used
Examples of use

 Case Study: Sainsbury’s use of OpCo/PropCo

Financing the Deal
Role of senior debt (including leverage level analysis)
Junior and other subordinate debt (including PIK)
Hybrid financing techniques
Role of Equity

 Case Study: Private equity investments in sale and leaseback

Course Conclusion: deal breakers and makers in sale and leaseback transactions