Duration: 1 - 2 Days
Full Fees: €600
Network Members Fee: €350
This practical course equips delegates to recognize the early warning signs, identify the companies that can be returned to viability through practical skills to evaluate alternative strategies, and structure an effective reorganization plan. Anticipating potential issues and finding the right solution is vital.
Delegates will be able to understand and evaluate loan work out and restructuring options, structure debt and repayment profiles, mitigate risk, analyze the implications in future cash flows and to the best of their ability, according to the legal options available, try to secure existing and forthcoming returns.
With today’s market liquidity and financing access issues, combined with some sectors poor business performance, companies often fall into financial and economical distressed situations, urgently seeking solutions to imminent financing requirements. This course helps and prepares delegates to deal with those situations and even detect them before they happen, allowing them to proactively deal with them before any events of default.
- Understanding the Lender’s Options in the Context of the Current Debt Structure
- Promptly Detect Early Warning Signals (EWS)
- Loan and Deb Workouts – Lender’s Options
- Debt Restructuring (Concepts)
- Restructuring Alternatives / Methodologies (In Detail)
- Restructuring Mitigants To Apply (What to Lookout For and What to Apply)
- Insolvency and Bankruptcy Options & Problems
- Identify and signal decline in a business in a timely manner.
- Recognize credit quality deterioration earlier for a more efficient response.
- Elaborate a more effective plan of action to address troubled cases and maximize recovery.
- Develop ongoing “systems” to deal with problem credits as they appear.
- Final Case Study
Who should attend
This Distressed Debt course is aimed at those already familiar with corporate credit analysis. Credit risk managers, bankers, underwriters, bond and/or equity investors and other finance professionals working in credit risk management and problem loan areas, restructuring, work-outs and special attention units.
SESSION 1: DEBT STRUCTURE
- Understand the current Company’s/Group’s debt position
- Analyze the current Company’s/Groups liquidity position
- Analyze leveraged loan structures and their restrictions
- Establish what distressed Company’s/Group’s assets are worth
- Understand the legal issues/settings surrounding the loan(s) restructuring (including covenants)
- Analyze all the risks: macroeconomic, sector, business, financial, management and ownership
- Assess the Debt Ranking / Priority (Different Classes of Debt and Other Classes of Creditors)
- Historical Industry and Sector Recovery Rates (if available)
- Corporate / Company Reorganization?
SESSION 2: EARLY WARNING SIGNALS (EWS)
- Symptoms of a deteriorating credit: Financial, non-financial and market indicators
- Distinguish an underperforming business/credit from a problem credit/loan/debt
- Macro-economic and sector indicators
- Challenged Business Models
- Refinancing and Liquidity Risks/Problems
- Leverage Problems
- Loan Structure Problems
- Management & Ownership Issues
- Main Triggers to Distressed Credits
- Liquidity Issues
- Covenant Breaches
- Insolvent Trading
- Business & Other Issues
- Control Issues
- The core concepts surrounding loan defaults
- What to do when faced with a default
Case Study I – SME / Corporate Company in Business and Financial Distress
SESSION 3: LOAN / DEBT WORKOUT
- Exit Options for the Lender
- Sale of Exposure / Debt Sale
- Negotiate / Restructure
- Enforce / File for Bankruptcy
- Insolvency Regimes
- Quantify potential recovery for creditors
Case Study II: Mid-Corporate Company possible outcome and real-life workout outcome
SESSION 4: DEBT RESTRUCTURING
- Top Restructuring Alternatives / Methodologies
- Remedial Business Plan
- Remedial Business Plan with Forbearance
- Restructuring with Security/Collateral Increase
- Restructuring with New Money / Fresh Cash Injection
- Restructuring with New Equity Raise
- Restructuring with a Payment in Kind (PIK)
- Syndicated Restructuring
- Debt/Loan Sale
- Debt for Equity Swap
- Debt for Debt Swap