Debt Finance for Lawyers This course can also be presented in-house for your company or via live on-line webinar

Transcription

1 Debt Finance for Lawyers This course can also be presented in-house for your company or via live on-line webinar The Banking and Corporate Finance Training Specialist

2 Course Overview This programme has been developed to give lawyers and others looking to gain a better understanding of the different types of debt, the key documents and critical issues as well as the financial and strategic rationale behind the structure and the products which are used. It is often the case that lawyers drafting documentation require a better understanding of the financial Course structure Overview and products and yet they have not been trained for this purpose. On smaller transactions lawyers will often be asked by clients for an opinion on the most appropriate financial structure or perhaps a viewpoint on the options that are being proposed by financial advisors. This programme will provide lawyers with a more in depth understanding of the products and structures which are used in the debt markets that they are likely to encounter in their everyday work. The programme will make copious use of examples and case studies to practically illustrate the concepts. Course Content Topics The Three legs of capital structure application, pros and cons Equity Shares and preference shares Shareholder loan notes - rationale Debt overview of the various types of debt Hybrids Convertibles Bonds/ Loans Convertible Preference shares Capital Structure Theory Creating value through optimising the financing structure Overview of Debt financing Investment Grade vs High Yield/ Leverage / Junk Key differences Use and application Cash flow lending vs Asset Based lending Corporates vs Private Equity any difference? Review of typical PE structure Loans vs Bonds summary of key differences Senior vs Junior debt Example: Review Edcon structure Loan Documentation Loan Market Association precedents LMA Facility Agreements LMA Single Currency Secured and Unsecured Term Facilities Agreement for East Africa (Kenya, Nigeria, Tanzania, Uganda), Nigeria and Zambia 1 General layout of the loan How to read the loan The key commercial sections The Group, the Restricted Group, Material & non-material subsidiaries The Permitted baskets- hard capped and grower baskets

3 The Covenants & Undertakings Information General undertakings Financial maintenance covenants The Events of Default Structuring issues (key issues for lenders) Security & Collateral & guarantees Control of security Ability to accelerate Ease of enforcement (single point of enforcement) Financial Assistance Kenya Kenyan Companies Act South Africa - 44 Companies Act, 71 of 2008 Uganda - 63 et seq. Companies Act 2012 Ranking & subordination Contractual (Intercreditor agreements) Structural subordination Temporal subordination Tax issues Group- tax relief Thin Capitalisation issues Transfer pricing Withholding taxes Senior loans Arranging the loan Bilateral Syndicated deals Club deals The dramatis personae in a bank & their roles Types of facilities Acquisition loan Capex facilities Revolving Credit Facilities Accordion facilities Margins & margin ratchets Libor floors rationale and use Original Issue discount ( OID ) - rationale and use Tenors / terms Amortising vs Bullets - TLA vs TLBs Mezzanine Target returns Coupon Structure Cash pay PIK / Accrued Warrants

4 PIK Target returns Coupon Structure PIYW/ Toggle PIYC Unitranche / Direct (alternative) lending Typical providers & players in the market Documenting & Structuring the Unitranche One document or two - Key considerations Classic unitranche Typical terms and pricing High Yield Bonds Key terms and features Incurrence nature of the covenants The main covenants Covenant structure Case study: structuring a leveraged buyout deal using a variety of debt instruments Edcon

5 Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.