Negotiating and Issuing High Yield Bonds This course is presented in London on: 1 June November 2018

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Evelyn Hoover
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1 Negotiating and Issuing High Yield Bonds This course is presented in London on: 1 June November 2018 The Banking and Corporate Finance Training Specialist

Course Objectives Participants will: Learn who is issuing HYB and why? Understand the size of the market, and what these bonds look like when they are issued.

2 Course Objectives Participants will: Learn who is issuing HYB and why? Understand the size of the market, and what these bonds look like when they are issued. Understand how deals are brought to market, allowing for market conditions and examine the documentation, which is key to the deals value. Gain an understanding of the key terms, such as Pledges, Maintenance Covenants and Equity Cures. Course Overview Appreciate the latest trends in the market and why they are happening. For example, why investors are excepting the move to Cov-Light deals, despite them not offering the same protection as investors insisted on in the past. Have explained to them all the main terminology used in HYB deals and just as importantly in what context they are used. Will look at recent issues to highlight the main points discussed in the programme, and to illustrate the terminology discussed. Course Overview The High Yield Bond Market reached a record of 75bn issuance in This year has so far shown no signs of slowing down. Selecta Group, the Dutch incorporated food and drinks vending machine provider, started 2018 with two large issues, already equalling some of the largest deals of Both bonds were issued on the 1 st February this year. Selecta issued two 6 year bonds; a 765 m 5.875% fixed and a 365m floater paying 3 month Euribor bp. The HYB market is complex with detailed jargon and documentation. This course is designed to demystify the terms used in negotiating and issuing. We use real life examples to explain the issues in an easy to understand way. We will look in to the latest trends and explain the motivations and outcomes behind recent changes affecting the market, such as the deterioration of covenants and investor protection. The programme is designed to give participants an in depth understanding of the High Yield Bond Markets and how deals are negotiated and issued. Delegates will understand how the market operates, seeing who is issuing and who is bringing the debt to market. We will look at recent real life issues as examples. Course Content Overview of High Yield Bonds Size of the Market / Market Growth Examples of High Yield Bonds A look at real bonds in today s market place Credit Ratings The Ratings Agencies Investment Grade v High Yield Debt Current Credit Spreads What are the current Credit Spreads in the Market for High Yield Bonds The Role of AFME Association for Financial Markets in Europe Focus on promoting transparency and liquidity in the high yield market

3 How affective are AFME? Fallen Angels Private Equity Issuance Recent New Issues Case study: We look at recently issued High Yield Bonds from the market What is being issued and why? The Major Bookrunners Ranking of Lead Managers / Global Capital Life Cycle of an Issue Origination / Syndication / Underwriting / Distribution Pricing a High Yield Bond Issue From the Government curve From the Mid Swap curve Interest Rate Swaps Overview Where Mid swap rates come from Duration Risk Market risk of a bond What impact do changing interest rates have? Case study: we look at the pricing of the recent issues of Aston martin Selecta Group The Documentation Pledges Negative Pledges Early redemption / Callable and Puttable bonds Examples are used to show the impact for investors of call and put options imbedded in to bonds Events of Default Seizing Collateral Recovery Rates Cross Default Risk Factors Case study: We look at an example of a High Yield Bond and discuss the Risk Factors listed in the documentation. Covenants EBITDA as a constituent of Covenants Maintenance Covenants Case study: we look at examples of covenants and their impact Carve Outs Baskets Breach of Covenant Covenant Erosion Impact on the market of these recent developments Cov- Loose (leverage only financial maintenance) Cov Light (Springing Leverage)

4 Equity Cure Recent provision changes allowing the company to receive equity capital and the impact on investors Shareholders curing a covenant breach by injecting further equity funding. Case study: we look at an Equity Cure Sample Clause and discuss the meaning and jargon. Post Default Alternatives Toggle Notes Deferred payment PIK Case study: Transaction Execution the pre-launch task time line from week 1 through to week 6. We discuss all the steps that must be taken before we can bring an issue to market. Exercise: Delegates look at a recent issue prospectus and examine the risk / reward ratio. Class discussion: Should we invest, what are the risks? 09:30-17:00 London Standard Price: VAT Membership Price: VAT

The venue and timing can be agreed to suit the client, as well as the selection of the

5 In-House Training Delivering this course in-house for a number of participants could be very cost effective. The venue and timing can be agreed to suit the client, as well as the selection of the trainer and the precise contents of the seminar. E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.

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