Leveraged Finance Strategies
In-house
Intensive 2 day training for M&A and LBO specialists, Corporate Financiers, Credit and Equity Analysts, Lawyers and Advisors exploring:
- The latest trends in Leveraged Finance
- The lifecycle of an LBO
- Which businesses make a good LBO and why
- Use of equity, debt and hybrid financing strategies
- Achieving optimal LBO structure
- Exit considerations
- Calculating risk and returns
For our M&A, LBO and other Corporate Finance programmes in LONDON click HERE.
Description
Leveraged finance has gone through turbulent period but some experts believe that now is the best time to prepare for when the markets pick up.
This very practical two day course will analyse the latest strategies of leveraged finance in the credit crunch times. Through extensive use of exercises and real life case studies participants will analyse the LBO life cycle, assess risks and establish attractiveness of companies taking part in LBOs transactions.
Delegates will be able to decide on the optimal capital structure for financing transactions, explore debt modelling nuances and build their own LBO model. Finally, participants will be able to make the right funding and operational assumptions and select the best exit strategies.
The Leveraged Finance course is designed for professionals with some experience in the sector who would like to expand their understanding of the market and gain new practical tools to address LBO transactions.
Main Topics Covered During This Training
- Life cycle of an LBO
- Latest trends in the LBO market
- Bank, private equity and seller’s perspective in the LBOs transactions
- Which businesses make good leverage buyouts and why
- Exit strategies and considerations
- Assessing attractiveness of different companies in an LBO transactions
- Syndication and exit problems
- Use of equity, debt and hybrids in the LBOs
- Analysing the structure of a large cross-border transactions
- Calculation or risk and return
- Senior debt and hybrids and mezzanine instruments
- How to achieve optimal LBO capital structure
- Creating an LBO model using Excel
- Debt modelling: rates, credit rations, covenants and payback
- Funding and operational assumptions for LBO
What Will You Learn By The End Of This Training
By the end of this highly practical training participants will have a solid understanding of leverage finance and the LBO market including the latest trends and implications of the credit crunch on the leverage markets. Delegates will be able to:
- Understand the lifecycle of an LBO
- Create a LBO model using Excel
- Assess motivations of different parties involved in a buyout situation and decide which business make a good buyout and why
- Estimate and choose the most optimal capital structure to finance LBO
- Understanding risk profiles of LBOs
- Analyse the structure of a large cross-border transaction
- Apply the nuances of the debt modelling
- Correctly establish funding and operational assumptions for an LBO transaction
- Choose optimal exit strategy
Who Should Attend
From Corporates, Commercial and Investment Banks, Private Equity and Fund Management, Consultancies, Accountants and Legal Companies:
- M&A and LBO Specialists
- Deal Team Members
- Corporate Financiers
- Corporate Relationship Managers
- Credit Officers
- Financial and Market Analysts
- Credit and Equity Analysts
- Investors
- Potential Buyers and Sellers, Borrowers and Lenders
- Securities Analysts
Teaching Method
This is a highly practical course with many real life case studies and exercises. Tutor will be focused on teaching practical strategies that can be taken back to your business and put into immediate effect.
You will benefit from comprehensive take away course documentation.
In order to help us establish your individual and business concerns, you will be asked to fill pre-course questionnaire.
Because of the nature of the course the number of places is limited and will be filled on first come, first accepted basis. We advise to book in advance in order to avoid disappointment.
Delegates are expected to bring a laptop with Microsoft Excel. If necessary, we can provide laptops for an additional fee of £100 + VAT.
DAY 1: LEVERAGE FINANCE OVERVIEW
Leveraged finance context
- Brief history of LBO
- Basic principles of leverage and LBOs
- Private Equity as an asset class for investors
- Different transaction types: Management Buyouts (MBOs); Management Buyins (MBIs); Public to Privates (P2Ps); Recapitalisations; Secondaries and Tertiaries
- The seller’s perspective
- The bank perspective: predictability and visibility of cash flows
- The Private Equity perspective: growth potential or an ‘angle’
- Lifecycle of an LBO
Case Study: Participants decide if they would participate as Private Equity sponsor in the proposed MBO of Harvey Nichols Plc
Which businesses make good leveraged buyouts?
- The bank perspective: predictability and visibility of cash flows
- The seller’s perspective
- The Private Equity perspective: growth potential or an ‘angle’
- Lifecycle of an LBO
- Jumbo deals vs. Mid market deals
- Exit strategies / exit considerations
Case Study 1: Deciding which of two companies the Leverage Finance team would lend to in a leveraged buyout. Delegates are given summary information and may ask questions to help determine the relative attractiveness of the two companies as potential clients.
Case study 2: Performing a 'quick and dirty' LBO analysis
Latest trends in LBO market
- The Credit Crunch and its implications
- Syndication and exit problems
- 'Cov-lite' deals – a thing of the past forever?
- Reg changes i.e. changes to capital gains tax?
- Current trends in leverage multiples, pricing and structures
Basic review of financial instruments
- Equity – Ordinary and Preference
- Debt – Bank Debt and Bond
- Hybrids – Convertibles and Exchangeable
- The pecking order theory
- Interesting decisions on debt: Fixed or floating rate? Straight or convertible?
Case Study
Part 1 Delegates analyse the structure of this large cross-border transaction.
Part 2 Delegates recommend a financing structure for a possible acquisition , based on historic and forecast financials for each company and compare this with the actual recent deal structure.
DAY 2: FINANCING ALTERNATIVES AND MODELLING
Financing alternatives: equity
- Calculation of risk and return
- Exits
- Calculation of risk and return and IRRs
- Preference shares
Case Study: The MBO of Go: the choices for exit from investment
Financing alternatives: debt
- Senior debt and other notes
- Pricing and tenure
- Evolution of pricing over past 3 years
Financing alternatives: hybrids
- Mezzanine instruments
- Use of warrants
- PIK Notes
- Vendor loans
Case Study: Delegates review recent LBO transactions featuring hybrid instruments
Achieving the Optimal LBO Capital Structure
- Objectives
- Checklist for investment
Case Study: LBO of Telediffusion de France - Analysing suitability and risks, structuring debt and assessing the debt service capability.
LBO modelling
In these sessions, participants will work in groups using Excel to prepare an LBO financing model.
The MBO in a public-to-private transaction involving a French public company
Participants will input and make assumptions for:
- Funding assumptions: levels of senior and subordinated debt, equity requirements, repayment of the debt over the life of the LBO
- Debt modelling: rates, credit ratios, covenants, payback (amortisation vs. cash sweep), PIK vs. cash coupon
- Operational assumptions: identifying and analysing the key cash flow drivers, analysing profitability, financial efficiency as well as balance sheet and cash flow ratios
- Exit and return analysis: IRRs available to private equity
Qayyum Hafeez
Qayyum has over 13 years of investment banking and private equity experience. He is currently working as a senior vice president in GCC based private equity fund in an investment bank in oil and gas industry. His role there is to source, evaluate and invest in private equity and execute M&A and joint venture opportunities in oil and gas industries in the Middle East region. Prior to this, Qayyum was a principal at Odeon Capital Partners, a $120 million private equity fund based in New York City and before in Bear Stearns' Mergers & Acquisitions and Leveraged Finance investment banking groups in New York where he was involved with multi-billion dollar transactions in retail, consumer products, technology and manufacturing industries.
While he was living in New York City from year 2000 through 2008, Qayyum was involved in many teaching and training engagements at university and corporate level. He was a guest speaker at New York University's Stern School of Business as well as taught a full-term MBA course at the Long Island University. His teaching experience include workshops at New York Private Equity Network the association which has over 500 active members.
IN-HOUSE TRAINING
- If you have a team of 4 or more this course can be customised and organised in-house at your convenience. Contact one of our advisors to find out more.
Call us now on +44 (0) 207 193 5035
or send an e-mail to: enquiry@eurekafinancial.com
