Loan Workouts & Restructuring

As a result of the slowing global economy an increasing number of borrowers are failing to meet their loan obligations. Banks lending to such troubled borrowers are often faced with a dilemma: enforcing liquidation which can provide certainty of a short term return but which can involve a significant loss of principal, or giving the borrower more time which adds yet more uncertainty to a risky recovery process. In tough liquidity conditions, such as today’s global credit crunch, credit professionals are required to quickly identify what is causing borrowers problems and provide the most appropriate and cost effective financing solution. Such solutions can be unique to the sector in which the company operates and specialist knowledge may be required regarding leverage buyouts, corporate loan workouts and particularly immediate organizational financial restructuring. Access to credit and knowledge of how to implement relevant credit strategies will be the key-determining factor as to which companies survive this crisis. At the end of this conference, participants would have gained on the following (among others): - A clearer overview of credit issues including regulations, rating agencies, cash flow, debt issues, corporate loan workouts and financial restructuring - Analysis of credit risks targeted at avoiding losses

Venues

Dublin
London
Dubai
Edmonton (CAN)
Lagos/Abuja

Dates

Dublin	London	Dubai	Edmonton (CAN)	Lagos/Abuja
TBD	TBD	TBD	TBD	TBD

Cost

$4,000 per participant (USD) (=N=)

For Whom

Finance Managers & Accountants in treasury functions
Officers responsible for cash management
Financial Analysis and Budgeting Managers and Supervisors

Snapshot of Course Content

Overview of loan workouts and Restructuring
Lessons from experience
Introduction to the loan workout process
Initial analysis: use of liquidation models to assess each stakeholder’s economic interest
Restructuring the balance sheet of a highly leveraged company – B2B courier
Case study: restructure the company’s balance sheet and propose Heads of Terms
Debrief will include restructuring term sheets, rationale, and actual outcome
A retailer in distress: early warning signals and lender actions
Identifying causes of the problem and creative accounting issues
Stakeholders’ economic interests and negotiating positions
Liabilities crystallized on a gone concern basis
Case study: Jessops – operational and financial restructuring
Assessing viability and structuring pricing (including kickers)
Debrief: Current situation – Who will buy the debt?
Negotiating positions of stakeholders
Negotiating terms of financial restructuring
Use of relevant terms: increased interest rate, PIK, restructuring fees, success fees, warrants, convertible term loans, debt-equity swaps
Basel II considerations
Case study: Biofuels Corporation – causes of financial distress and restructuring
Addressing causes and ensuring economic viability
Debt-equity swaps and nuisance power of shareholders
Takeover structure
Multi-creditor workout: overview of The London Approach
Steering committees and debt moratoria
Case: distress at a tier one auto components supplier
Collateral performance in distress and car industry factors
The London Approach in action
Bondholder nuisance power, debt-equity swaps, warrants, PIK
Ring-fencing problematic operations
Jurisdictional changes and restructuring term sheets
Case study: Schefenacker – negotiating with different creditor classes
Valuing the distressed company’s assets: DCF / NPV approaches
Selecting discount rates and calculating WACC
Use of Capital Asset Pricing Model and terminal value models
Comparable company and transaction multiples
Case study: Hotel in distress – accept offer or invest?
Causes of financial distress and corrective measures
Consultants’ reports and economic viability assessment
Evaluating stakeholders’ interests and distressed debt investor outcomes