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GIBS Business School

Problem Loans & Distressed Debt Restructuring

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About the course

This programme is delivered in partnership with Euromoney Learning Solutions, a world leading provider of premium public courses, eLearning and tailored learning solutions.

Course overview

Many lending institutions across Africa and rest of the world are burdened with a high level of actual or potential non-performing loans or other credit exposures. In these situations, lenders need to maximise their recovery rates and optimise their long term returns, subject to prevailing insolvency laws, the lender’s own capital situation and sometimes to the wider interests of other stakeholders in the firm.

Specialist knowledge is required to analyse the cause(s) of the borrower’s problems and to design and implement an optimal restructuring solution. The solution can involve both operational and capital restructurings, including debt for debt swaps, full or partial debt for equity swaps, discounted debt buybacks, equity cures, shareholder loans etc. In some cases, the best outcome may be full or partial asset liquidation. Cashflow forecasting is key to creating an optimal debt restructuring solution and the course covers distressed debt restructuring solutions in Excel. Case studies focus on a range of sectors including property, retail, infrastructure, house building, media and industrial.

On completion of the course, delegates will receive a certificate of completion issued in conjunction with the University of Pretoria. As the learning provider, GIBS will, on request, provide the supporting documentation to organisations. This documentation can then be used during the skills levy claim back process, with which organisations can motivate a claim back at either a level B or level D.

How you will benefit

At the end of this programme you will be able to understand the following topics:

Setting the scene:

  • Definitions of NPLs and distressed debt; and
  • Overview of recent trends in default and distress rates.


Causes of distress and common early warning signs that a firm is becoming distressed:

  • Case study: property/construction firms with early warning signs of distress; and
  • Case study: cyclical industrial firm with early warning signs of distress.

Analysing the income statement of distressed firms:

  • Case study: Analysing the early warning signs in the income statements of retailers, oil firms and industrial firms; and
  • Case study: Calculating underlying earnings of Balfour Beatty, a weak infrastructure company.

Analysing the cashflow statement of distressed firms:

  • Case study: Analysing the cashflow statements of firms in distress and in default.

Analysing the balance sheet of distressed firms:

  • Case study: Analysing the balance sheet of weak and distressed firms

Modelling for distressed credits in Excel:

  • Case study: Modelling in Excel

Debt restructuring overview:

  • Option 1: Operational restructuring for distressed entities
  • Options 2 – 4: Restructuring of loans and of the capital base:

  • Option 2 – equity injection, shareholder loan, equity cure;

  • Option 3 – amendment of financing terms - PIK, PIK toggle, cash sweeps, extended maturities: and

  • Option 4 – debt restructuring.

  • Case studies: Examples of distressed firms that have implemented these solutions and modelling these changes in Excel

Monitoring distressed and non-performing debt.

Overview of default predictor models.

Additional information


The teaching methodology used on this course combines formal theoretical instruction with frequent reference to market data, use of exercises and case studies. Case studies are based on real situations and are designed to help delegates implement new valuation techniques and to learn from empirical experience. Delegates are expected to know how to use Excel at a basic level and should bring a personal computer with them. The course is intended to be practical and interactive, with delegates encouraged to ask questions. The techniques taught to delegates are intended to be of immediate practical use in the workplace.

Who should attend

  • Bank credit officers;
  • Investment bankers;
  • Management consultants;
  • Bond credit analysts;
  • Fixed income/credit traders;
  • Fixed income/credit sales; and
  • Financial decision makers in corporations.

Trust the experts

Sarah Martin

Former Executive Director of CSFB and Lehman Brothers, the Course Director has spent seventeen years working as an investment banker in Europe and the US. She has principally worked in the credit markets and has experience of the US and European high grade and high yield markets, the European new...


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