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Fitch Learning

Capital Structures and Debt Products

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Next dates

May 2—3
2 days
London, UK
GBP 2095 ≈USD 2722
GBP 1047 per day
Jun 24—25
2 days
Singapore, Singapore
USD 2995
USD 1497 per day
Jul 11—12
2 days
London, UK
GBP 2095 ≈USD 2722
GBP 1047 per day
+2 more options


The overall goal of this course is to enhance the analytic skills needed when evaluating or structuring funding solutions for both new business opportunities and in the context of re-financing existing corporate debt. The course is highly interactive and will use a combination of case studies, exercises and examples to illustrate the key learning points. The focus is on recommending an appropriate capital structure and debt instruments using cash flow forecasts. Participants are expected to have a basic knowledge of Excel and a sound understanding of corporate risk analysis – from experience or after attending our Corporate Credit Analysis course.

Key Learning Outcomes:

  • Quantify sustainable debt levels in context of business strategy, market conditions and potential corporate actions by setting cash flow drivers in a prepared Excel model
  • Understand the relative advantages and disadvantages of various debt instruments and the factors influencing a corporate treasurer’s choice
  • Structure funding solutions using bank and debt/equity capital market products to meet the commercial and financial needs of the company whilst protecting the bank’s or bond investor’s position


Day One

Analytic Overview

Overview of market trends and refresher of an analytic framework for credit assessment necessary for deal structuring.

  • Market trends: Leverage multiples, capital structures and instruments
  • Illustration case study (sent as pre-course assignment): Debrief of analysis of a potential corporate borrower focusing on historical performance, capital structure and setting the scene for key forecast assumptions

Business and Financial Drivers

Focus on business drivers behind the need of financing. Application to a case study by setting forecast assumptions needed to assess debt capacity.

  • Macro, sector and firm-specific factors which influence strategy
  • Corporate growth strategy: Organic or through corporate acquisitions
  • Features of corporate acquisitions:
    • Rationale behind corporate acquisitions and sponsored buy-outs
    • Acquisition price, potential synergies and integration costs
  • Timing and impact of existing financial obligations
  • Dividend and share repurchase policy
  • Forecast assumptions using industry peer and historical data
  • Alternative scenarios and sensitivity analysis
  • Debt capacity analysis: Amount of debt that can be serviced from future cash flow
  • Refinancing risk built in a funding structure
  • Illustration case study: Set key forecast assumptions and assess debt capacity

Day Two

Structuring Funding Solutions

Emphasis on the various ways funding requirements can be met, the reasons behind and the appropriateness of leverage. Overview of several funding instruments as well as practical application of debt origination by using a cash flow forecast model to assign an appropriate debt structure. Further focus on terms and conditions such as ranking and covenants.

Capital structure

  • Shareholder and management motivations; performance measures and the impact on funding
  • Balance between business risk and financial risk
  • Application

Debt profile

  • Cash flow forecasts to structure debt: Amount, currency, tenor, drawdown and repayment profile
  • Control of lending amounts through borrowing base structures
  • Refinancing as a source of repayment: Bullet, zero coupon, payment-in-kind
  • Application

Debt and hybrid products

Bilateral and syndicated bank debt products

  • Alphabet tranches, uni-tranche
  • Revolving credit facilities
  • Working capital, borrowing base loan
  • Bridge finance: Asset divestment, capital market issue
  • Acquisition and standby facilities
  • Restructuring and capital expenditure lines
  • Subordinated debt: Second lien, mezzanine loan, hold co-shareholder loan

Debt capital markets products

  • Investment grade bonds and commercial paper
  • Sub-investment grade/high yield bonds, hold-co bond
  • Specific features: Zero coupon, payment-in-kind

Hybrid capital market products

  • Perpetual debt
  • Preference shares
  • Convertible debt

Application: Worked examples relating to several funding products


  • Legal, structural and economic subordination
  • The role of security, guarantees and third-party support
  • Inter-creditor agreements
  • Application


  • Safeguards to minimize the risks and provide early warning signals
  • Effective financial covenants, covenant ‘lite’
  • Stress testing to ensure appropriate levels of attainment and trigger covenants Application


  • Risk return profiles – to avoiding equity risks for debt returns
  • Default and recovery statistics
  • Market indicators (bond market yields, CDS) and ratings as a basis for comparison

Case Study Applications

Approve a funding package for an acquisition or re-financing and recommend minimal level of protections and other term and conditions.

Who should attend

Financial professionals with an interest in debt origination and structuring, or further enhancing their corporate analysis skill with a focus on corporate funding solutions. Financial professionals in a credit risk, syndication, debt origination, asset investment or relationship management role, as well as those engaged in the assessment of counterparty risk from an underwriting viewpoint or trade debtor exposure. Regulators or those in a supervisory role with an interest in understanding the underlying credit assessment needed in the organizations or departments they assess. Participants are expected to be familiar with financial statements and corporate credit analysis.


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