Debt and DCM (Part 1)
We will spend two sessions on debt as the challenges are the variety of debt and bond maths. In this first section, we will start by taking a look at the time value of money, through government and the wholesale (LIBOR and mid-swap) yield curves to explain the base cost of money over time. The aim is to understand the foundation of the cost of debt, and its dependence on debt maturity. However, we will also explore re-financing risk through the homework case study.
- Bond maths including present and future valuing, rates and yields
- Government yield curve
- LIBOR and the wholesale yield curve (LIBOR and mid-swap)
- Bonds and their characteristics
- Debt maturity profile and assessing re-financing risk
The delegates will go through the steps of credit risk assessment, shadowing the rating agencies Moody’s and S&P’s methodology. We will explain key risk factors, both qualitative and quantitative. We will focus on key credit ratios and cash flow calculations.
- Profitability and cash generation
- Working capital, capex: sources vs. uses of funds
- Cash flow statement focusing on key stages, including funds from operations, free operating cash flow and discretionary cash flow
- Financial leverage and operational leverage
- Senior vs. subordination (legal)
- Key credit ratios including: debt coverage, interest coverage and asset coverage
- Re-financing risk and creditor relations
- Business strategy, management and impact on credit risk
Debt and DCM (Part 2)
This is the second part of the debt section, focusing on credit premium and corporate debt products. We will explore a company’s specific risk (credit risk) and the required risk premium over and above the base time value of money as the company’s cost of debt.
We will explore the classic debt securities, commercial paper and bonds. We will look at stand alone bonds vs. issuances under a note programme. We will look at bond agreements, bond placement process and terms and conditions.
We will discuss the bank debt market, focusing on revolving credit facility and term loans, focusing on investment grade debt at this point. We will contrast bond documents with loan documents, particularly on any differentiation in terms and conditions. We will look at the loan syndication process. We will conclude by looking at other types of debt products, including structured finance.
- Credit spread and cost of debt
- Commercial paper
- Bonds, bond placements, and bond documents
- Bank debt including revolving credit facility and term loans
- Credit facility agreement
- Loan syndication process
- Debt terms and conditions including financial covenants
We will conclude DCM day with a wrap up case study.
Key case study
Financing strategy, quantitative and qualitative considerations in debt financing, cost of debt based on yield curve and re-refinancing risk. Case study to be based around the program case company.
Case assignment description:
- Kellogg’s short-term debt: 25% of total debt
- Suppose Kellogg’s intends to replace 15% of its ST debt with longer-dated debt
"Using AMT Online (AMTO) was excellent as it allowed me to work through the course material at my own pace. AMT Online was very easy to use and navigate through." ~ graduate, leading business school
What will you receive on the course?
While this is a face to face training course, a blended learning approach is taken and delegates will be provided with access to AMT Online. Our study materials contain both the knowledge and practice materials required to assist with the learning process and help you in your job role. Course materials include:
- printed course binder with copy of the slides
- laminated summary sheets
- 24/7 access to DELTA online learning environment
- class recordings
- course notes
- electronic homework/study files
Who should attend the course?
- New hires who have joined the firm late and missed the in-house program
- Individuals looking to fill a knowledge gap
- Experienced bankers looking to refresh their technical skills
- Teams employed in financial strategy roles from non-banking corporations
- Graduates preparing to interview for a role in the finance sector
- Students at business school and looking for a career in finance
This course is non-residential. The venue will provide light refreshments. AMT reserve the right to cancel or postpone sessions or change content if registrations are insufficient to continue 2 weeks prior to scheduled commencement date. Registrants will be given at least 5 business days’ notice of such changes.