High Yield Debt: Valuation & Risk Assesment

In this 4-session hands-on course, participants will look at various types of High Yield Bonds, with an eye to determining their theoretical value. We will also look at the various factors concerning their risk and viability as an asset class.

Starting with basic bond market theory and a survey of various sub-sectors of the High Yield segment of the bond market, attendees will look at several specific issues for the purpose of determining credit risk and theoretical valuation.

No sessions currently available. Contact client services to get the next available date.
Anyone interested in the analytical evaluation of this market, including those with differing backgrounds such as equity professionals, technology personnel, or those interested in the suitability of High Yield Bonds for personal investment.
No advance preparation required.
Students will be able to:
  • Demonstrate a practical understanding of how to price High Yield Bonds
  • Determine which factors affect interest rate risk of High Yield Bonds
  • Examine several ''real'' issues to assess theory & fact
Attendees should have a basic knowledge of financial industry concepts and a willingness to participate in ''hands-on'' calculations in order to maximize the value of this course. This course will require a financial or scientific calculator.
Session 1: Defining the High Yield Market
  • Review of the historical development of the High Yield Market
  • Examination of how various factors (industry segment, cyclical vs. non-cyclical, etc.) impact the risks shared by all High Yield Bonds
  • Perform credit analysis of selected non-investment grade bonds

Session 2: Security Valuation & Risk Analysis

  • Review of bond pricing principles, yield calculations, interest rate risk
  • Calculation of bond yields for selected High Yield Issues
  • Demonstration of “spread-pricing” for selected High Yield Issues
  • Review of historic Default / Recovery statistics

Session 3: Market Valuation

  • Review of macroeconomic principles and their impact on company defaults
  • Examination of the historical market performance of the High Yield sector
  • Analyze several “market valuation models” with an eye to determining how well they serve as predictors for High Yield performance

Session 4: Portfolio Management

  • Determine parameters that define the legitimacy of designating High Yields as a separate Asset Class
  • Review portfolio management principles, with particular emphasis on Risk / Return tradeoffs and the role of correlation.
  • Examination of High Yield Bonds as a viable component in a well-balanced portfolio

Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.

Lunch included for all students taking day classes.