A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt
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. InA 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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Chapter 1 Introduction
Chapter 2 Common Leveraged Finance Terms
Chapter 3 Defining the Market and the Ratings Agencies
Chapter 4 The Participants
Chapter 5 Why Is Leveraged Finance Analysis Unique?
Chapter 6 The Major Components of Analysis
Chapter 7 Some Features of Bank Loans
Chapter 8 A Primer on Prices Yields and Spreads
Chapter 16 Key Leveraged Finance Covenants
Chapter 17 Amendments Waivers and Consents
Chapter 18 Making Money or Losing It Off of News Events
Chapter 19 Management and Ownership
Chapter 20 Im Looking at Debt So Why Does Equity Matter?
Chapter 21 Value Relative Value and Comparable Analysis
Chapter 22 New Issuance
Chapter 23 Distressed Credits Bankruptcy and Distressed Exchanges
Chapter 9 A Primer on Key Points of Financial Statement Analysis
Chapter 10 Credit Ratios
Chapter 11 Business Trend Analysis and Operational Ratios
Chapter 12 Expectations Modeling and Scenarios
Maturities Calls and Puts
Ranking of Debt
Other editions - View all
accreted value acquisition adjusted EBITDA amortization analyze asset sale asset value balance sheet bank agreements bank debt bank loans bankruptcy bond or loan bondholders bonds and loans callable capital expenditures carve-out cash interest change of control chapter claim company’s cost coupon covenants credit analysis debt holders debt instruments debt/EBITDA default deferred-pay DeutscheDialysis EBITDA/interest enterprise value entity equity example factors financial statements forma free cash flow funds high-yield holding company income statement industry interest expense interest payment interest rate investment investment-grade investors issuance issuer leverage ratio leveraged finance market LIBOR liquidity look maturity metrics million noncash operating outstanding pany pro forma ranking refinancing revenue scenarios secured debt sell senior notes senior secured sometimes statement of cash subordinated debt subordination agreement Table Total debt tranches transaction types typically usually valuation waiver What’s yield zero coupon bonds