Evaluating Distressed Debt

This unique class on Evaluating Distressed Debt evaluates a live distressed debt issue on the basis of current financial, brokerage reports, and press releases. Approximately one-third of the class is spent in presentation of the framework and methodology for evaluating distressed debt, one-third of the time is spent presenting and evaluating quarterly financial projections and liquidation values in bankruptcy, and one-third of the time in group presentation of strengths and weaknesses and recommendations on valuing the distressed debt.

Rather than just focus on definitions and exercises, this class develops a framework and methodology for evaluating a specific risk and for applying this framework and methodology to a current distressed debt issue.

23-Apr-2012 -- 25-Apr-2012Toronto, CanadaUSD$3375
New York Institute of Finance - Toronto9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Jack Foster; ] Mon Tue Wed Level: Intermediate

CPE CREDITS
21.5
Credit analysts, account officers, credit administrators, and debt investors.
This course involves extensive pre-reading, as well as preparation for each day's group discussions and presentations. The pre-reading material includes currents 10K's, 10Q's, loan agreements, management presentations, brokerage reports and press releases. Daily preparation includes quarterly financial projections and written credit recommendations.
Students will be able to:
  • Understand systemic techniques for approaching distressed debt credit risk judgment and for focusing on the key credit issues
  • Evaluate a company's overall business risk including its industry risk, competitive position and management
  • Evaluate a company's overall financial risk, including adjustments to its financial ratios and its financial policy, profitability, leverage, cash flow and financial flexibility
  • Evaluate loan agreements and the strength of creditors in controlling management and cash flow
  • Use a proprietary model, make and evaluate financial projections for assessing avoidance of bankruptcy
  • Evaluate loss given default, taking into account covenants, collateral, structural and contractual seniority, enterprise value and liquidation value
Day 1
Understanding and Assessing Distressed Debt Risk Factors
  • Definitions of risk
  • Evaluating risk
  • Financial projections

Distressed Debt Evaluation and Methodology

  • Business risk analysis

Case Study - Distressed Debt Case

  • Introduction - business risk analysis
  • Workshop - business risk analysis
  • Group Presentations

Day 2
Ratio Exercise and Adjustments to Ratios
  • Ratio definitions and exercise
  • Adjustments to key financial ratios

Evaluating Credit Agreements

  • Seniority and subordination
  • Covenants
  • Collateral

Distressed Debt Evaluations and Methodology

  • Financial risk analysis

Making Financial Projections

    Case Study - Distressed Debt Case

    • Workshop - making financial projections
    • Group presentations on financial projections

Day 3
Distressed Debt Case
  • Evaluating current assets in bankruptcy
  • Evaluating fixed assets in bankruptcy

Case Study - Distressed Debt Case

  • Introduction - financial risk analysis and overall risk assessment
  • Workshop - financial risk analysis and overall risk assessment
  • Group presentations

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.