Euromoney Learning Solutions

Loan Structuring, LBOs & Acquisition Finance

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About the course

This course is module 2 of Corporate Credit Analysis School

This course comprises three days of training in the fundamentals of corporate credit analysis, followed by the two days of training in debt structuring, acquisition finance and LBOs. You can attend either or both modules. After completing this course, you are invited to attend the 4-day Advanced Credit Analysis Course to take your knowledge even further.

Through every business cycle, banks and other financial institutions lose billions of dollars as a result of their failure to analyse credit risk correctly and foresee downside risks. Even if these institutions do not suffer direct financial losses due to default / market movements, they may be receiving an inadequate return for the risks involved. Given the increasing use of leverage by both the private and public equity markets, combined with heightened sovereign and geo-political risks, in-depth credit analysis is essential to avoiding credit and currency losses. Led by a former Lehman Brothers & Credit Suisse First Boston Credit Analyst & Company Valuation Specialist with over 17 years’ experience, this course will show you how to analyse corporate credit risk and how to assess an appropriate return. It does not extend to the analysis of banks, insurance companies or structured vehicles.

How will this course assist you?

The course will help you create a framework for credit analysis that can be applied to a wide range of corporate credit situations. Through case study analysis you will learn to analyse thoroughly different types of corporates to allow you to make sound business decisions.

During the first 3-day module, you will:

  • Review the main types of lending facilities, including loans, bonds and specialist credit products
  • Undertake detailed quantitative risk analysis including key credit ratios
  • Undertake financial modelling and forecasting in Excel
  • Practice how to apply sensitivity analysis
  • Analyse qualitative risk: sovereign, industry and company specific
  • Analyse the impact of corporate finance activity on credit quality
  • Analyse leverage in detail, including the determinants of leverage and the benefits to shareholders
  • Review credit ratings and the rating agencies’ approaches
  • Analyse the factors that determine credit pricing and assess whether credit investors earn sufficient reward for their risk over the credit cycle

During the second 2-day module, you will:

  • Review structural factors such as ownership, double leverage, structural subordination and contractual subordination
  • Examine how to structure a firm’s debt funding
  • Review the markets and products for acquisition finance
  • Review the main considerations for structuring acquisition finance
  • Analyse and model leveraged buyouts
  • Review documentation, with a particular focus on covenants


Day 4

Debt structuring, acquisition finance and LBOs

  • Structural factors
  • Shareholder structure
  • Ownership and support
  • Structural and contractual subordination
  • Double leverage
  • Risks from related parties and from lending to a group structure
  • Impact of structural issues on ratings
  • Debt structuring - techniques and principles

Reviewing the cashflow forecasts

  • Matching debt to cashflows and the asset base
  • Cashflow based lending versus asset based lending
  • Structuring the debt to include flexibility for different cashflow outcomes
  • Debt repayment and roll-over strategy
  • Debt maturity profile

What type of debt?

  • Review of the advantages and drawbacks of bonds, term loans, RCFs, working capital funding, private placements, commodity linked debt, convertible debt, equity linked debt etc
  • Secured versus unsecured; recourse versus non-recourse; bullet versus amortising; fixed versus floating; currency factors
  • Diversifying sources of funding
  • Certain debt features - accordians; variable pricing; cashflow based covenants
  • Recourse versus non-recourse

The capital structure

  • What is an acceptable or optimal capital structure?
  • WACC considerations
  • Shareholder and ROE considerations

Day 5

Acquisition finance

The market for acquisition finance

  • The main participants
  • Market size and developments

What type of acquisition?

  • Full control, partial control, minority stake
  • Asset purchase versus company purchase

Types of finance

  • Bridge facilities
  • Acquisition finance for sub investment grade deals
  • Acquisition finance for investment grade deals
  • Loans and investment grade bonds - main features
  • Leveraged loans, mezzanine, junior debt and HY bonds – main features
  • Recent transaction examples


  • Vehicles for acquisition finance
  • Regulated and listed entities
  • Structures and documentation
  • Security

Leveraged buyouts

  • Rationale to LBOs
  • Structuring an LBO
  • Reviewing a comprehensive LBO model and applying scenario analysis
  • Quick method of modelling and analysing an LBO
  • Assessing returns to equity and subordinated lenders

Documentation and covenants

  • What is the purpose of the loan and is it related to the repayment sources?
  • What is the structure of debt facilities?
  • Reps and warranties, conditions precedent, negative pledge
  • MAC clauses, events of default, cross default, equity cures etc
  • Covenant definitions (financial), including off-balance sheet liabilities
  • Covenant definitions (nonfinancial)
  • The nine key covenants for event and recapitalisation risks

Who should attend

  • Bank credit officers
  • Investment bankers
  • Management consultants
  • Bond credit analysts
  • Fixed income/credit traders
  • Fixed income/credit sales people
  • Fund managers
  • Treasurers
  • Compliance officers
  • Financial decision makers in corporations

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