Pragmatist's Guide to Leveraged Finance, A: Credit Analysis for Bonds and Bank Debt, Rough Cuts

Description

• Copyright 2012
• Dimensions: 6" x 9"
• Pages: 288
• Edition: 1st

• Rough Cuts
• ISBN-10: 0-13-285530-5
• ISBN-13: 978-0-13-285530-3

This is the Rough Cut version of the printed book.

The high-yield leveraged bond and loan market (“junk bonds”) is now valued at $3+ trillion in North America, €1 trillion in Europe, and another $1 trillion in emerging markets. What’s more, based on the maturity schedules of current debt, it’s poised for massive growth. To successfully issue, evaluate, and invest in high-yield debt, however, financial professionals need credit and bond analysis skills specific to these instruments. Now, for the first time, there’s a complete, practical, and expert tutorial and workbook covering all facets of modern leveraged finance analysis. In A Pragmatist’s Guide to Leveraged Finance, Credit Suisse managing director Bob Kricheff explains why conventional analysis techniques are inadequate for leveraged instruments, clearly defines the unique challenges sellers and buyers face, walks step-by-step through deriving essential data for pricing and decision-making, and demonstrates how to apply it. Using practical examples, sample documents, Excel worksheets, and graphs, Kricheff covers all this, and much more: yields, spreads, and total return; ratio analysis of liquidity and asset value; business trend analysis; modeling and scenarios; potential interest rate impacts; evaluating and potentially escaping leveraged finance covenants; how to assess equity (and why it matters); investing on news and events; early stage credit; and creating accurate credit snapshots. This book is an indispensable resource for all investment and underwriting professionals, money managers, consultants, accountants, advisors, and lawyers working in leveraged finance. In fact, it teaches credit analysis skills that will be valuable in analyzing a wide variety of higher-risk investments, including growth stocks.

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Sample Content

Table of Contents

Chapter 1 Introduction     1

Chapter 2 Common Leveraged Finance Terms     7

General Terms     7

Yield and Spread Definitions     11

Questions     14

Chapter 3 Defining the Market and the Ratings Agencies     17

Chapter 4 The Participants     21

The Issuers     21

The Sell Side     22

The Buy Side     23

Private Equity     25

Chapter 5 Why Is Leveraged Finance Analysis Unique?     27

Chapter 6 The Major Components of Analysis     31

The Components     32

A Pragmatic Point on the Various Aspects of Analysis     34

Chapter 7 Some Features of Bank Loans     35

Questions     40

Chapter 8 A Primer on Prices, Yields, and Spreads     41

The Basics     41

A Few Points on Yields     43

A Few Points on Spreads     43

Bank Loan Coupons     44

Duration     45

Total Returns     45

Deferred Payment Bonds: Prices and Yields     46

A Pragmatic Point on Terminology     48

Questions     49

Chapter 9 A Primer on Key Points of Financial

Statement Analysis     51

EBITDA     52

Capital Expenditures     57

Interest Expenses     58

Taxes     59

Changes in Working Capital     59

Free Cash Flow     61

The Balance Sheet     62

A Pragmatic Point on Financial Statements     64

Questions     65

Chapter 10 Credit Ratios     67

EBITDA/Interest Ratio     69

Debt/EBITDA     72

A Pragmatic Point on the Leverage Ratio     76

A Pragmatic Point on Valuations     77

Free Cash Flow Ratios     79

Changes in Working Capital     80

Dividends     80

Acquisitions     80

One-Time Charges   &nbs

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