Corporate and Commercial Banking
A tactical application program which builds on the techniques developed in the Cash Flow I, Cash Flow II, and Loan Structuring Fundamentals and Applications programs, providing participants with the application of these skills in the more challenging environment of balance sheet recapitalizations, acquisitions and other forms of transfer of ownership in privately held companies. Particular emphasis will be placed on the following key disciplines in the architecture and engineering of such deals:
- Rate of Return Measurements: Identification of the return objectives of capital providers
- Cash Flow Returns on Transactions: Quantification and determination of the borrower’s cash flow, debt capacity and its optimal capital structure
- Borrowing Structures: Identification of appropriate borrowing vehicles in acquisition financing, with an emphasis on the appropriate use of special purpose vehicles
- Holding Company vs. Operating Company Lending: The use of holding company vs. operating company structures, the merits and risks in such deals, and the implications of structural vs. contractual subordination
- Intercreditor Issues: Examination of intercreditor considerations between senior and subordinated debt, between debt and equity, and how such considerations impact the senior lender
- Loan and Transaction Documentation: Optimal covenant structures in acquisition and recapitalization financing, with a particular emphasis on considerations arising in covenant-lite deals
Assuming a basic knowledge of loan structuring (see Loan Structuring Fundamentals and Applications Program), the program is designed to offer more sophisticated insights into the disciplines of loan, transaction, and deal structuring and the skills demanded of relationship managers, credit officers, and structured financiers.
Using real life transactions reflecting transfer of ownership scenarios among middle market companies, participants will be asked to play the role of the banker as financial architect and financial engineer in defining how the loan in general, and the capital structure in particular, will be implemented.