Causal Capital

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Structured Finance
COURSE TYPE : [ INTERMEDIATE ]
COURSE DURATION : 3 Days
 

This structured finance course has been designed to walk across the entire landscape of the discipline end-to-end, taking in valuation through to selling to equity investors and finishing up with hedging strategies and cash flow management.

 

Different perspectives are shown so that a structured finance analyst can gain insight into how to sell to the bank, investors can identify what are the key risks they should be looking for and project financiers can learn how to price risk of delivery in their project.

 

Who Should Attend
Banker / Account ManagerLearn how to price risk on the project, how to offer various strategies to a client to allow them to be funded.  What are the industry standards for short, medium and long term debt.  How can an account manager maintain a portfolio of projects and assist in preventing against default. 
Project AnalystHow to value a potential opportunity, what are the best methods for valuation given different types of companies and stages of growth.   How are debt and equity betas factored into the WACC and how can the project be structured to protect investors. 
InvestorsWhat are key factors and ratios that need to be reviewed when looking for a successful project.  How can an investor set preferential options for their capital and what type of agreements allow them to protect the cash they inject.
Industry ExpertsSpecial focus on Manufacturing, Mining, Property Development will be given and the various risks that structured financial analysts need to be concerned about will be discussed.

 

AFTER THE COURSE YOU SHOULD BE ABLE TO

1)     How to value a business opportunity using many different approaches 

2)     Look at building the complete model  

3)     How to carryout sensitivity analysis and optimisation 

4)     Gain insight into how to carryout equivalent loan processes for operations 

5)     Understand the key ratios of a project and what they mean to the business 

6)     Learn how to protect investors using guarantees 

7)     Understand the key factors for project failure and hot to manage them 

8)     What are the various exit strategies for project operators and investors

 

COURSE GIVE AWAYS

Materials and spreadsheet examples will be given to all participants in electronic format so that they may take the examples away with them and evolve them further once the course has been completed.   In addition all attendees of any Causal Capital structured finance course will receive the CCPF which is an ongoing knowledge base for structured finance analysts.

 

MAIN TOPICS COVERED

SESSION 1 [ Project Finance Fundamentals ]

The course commences by reviewing the fundamental prospects of setting up a project and the various activities that need to be engaged.   Well before a deal is set, the project analyst must carryout a set of activities that allows them to understand the metrics of the space with which they wish to change. 

 

How do projects really derive value will be answered.

 

TVM and DCF

  • Quick referesher of Time Value of Money 
  • Various discount cash flow models from a project perspective
  • How are these concepts translated into the project domain  
  • What type of hurdles and discount factors do projects have
  • How are projects benchmarked 

 

Leverage and Funding Options WACC perspective

  • Matching principles and J-Curve analysis of funding strips 
  • Look at leverage and gearing 
  • How WACC differs in developing projects 
  • Share Holder Value and its link to WACC 

 

Valuation Market Based Approaches

  • How to value companies against the market 
  • Problems and uses of CAPM 
  • How to use market based approaches to establish betas 
  • What are the risks of market based approaches

 

Revenue Forecasting

  • Time series and moving average models 
  • Regression techniques for revenue forecasting 
  • How to factor risk into revenue models
  • Gain insight into product cycles
  • How to correlate and infer revenue from market models

 

Cost Analysis

  • The variable and fixed components 
  • ABC unit costing and economies of scale
  • Look at Real Options for expansion   
  • Switching cost and leasing models

 

Feasibility Studies

  • Methods for building up a stochastic feasibility study 
  • How to use Bayesian trees in feasibility  
  • How to connect feasibilit outcome to risk 
  • How to price the feasibility estimated cost into the project

 

 

SESSION 2 [ Evolving Fundamentals and Presentation ]

The second is a natural extension of the first bringing together the basic concepts of structured finance into a more sophisticated realm.  It is ideal for practitioners who have specific issues over certain areas of the discipline.

 

Growth models and terminal value

  • Various approaches to estimate terminal value 
  • How to connect terminal value to NPV model 
  • How to weight such models in the valuation
  • How to use terminal value model for exit strategies

 

SPV Models

  • A look at the economic benefits of various SPV models 
  • How does the SPV model protect investors and the project 
  • What limitations are created in company growth from SPV models
  • What does the bank expect to see in an SPV model
  • Tax benefits that can be derived from the SPV model

  

Sensitivity Analysis

  • How to carryout a sensitivity analysis of the project
  • How to understand the effects of project risk on sensitivity
  • How does the sensitivity outcome effect the optimisation model
  • Common approaches for scenario analysis and return curve shape  

 

BS, IS, CF

  • How to sweep and build dynamic model
  • How to present summary deal sheet 
  • Build a deal sheet with options
  • How to sell the deal sheet to the bank or equity investor

 

Project Health Ratios

  • What are the key ratios for project health banks perspective 
  • DU point analysis 
  • How to carryout trend analysis from ratios
  • How to build ratio benchmarks

  

SESSION 3 [ Extended Topics ]

The last day reviews

 

Options Instruments

  • Understand option instrument in detail
  • Why are options important on projects 
  • Pricing - binomial and B&S 
  • Real options 

 

Value Allocation and Preferential Equity  

  • How to create multiple equity funding options
  • How to value each funding strip 
  • How to price equity on private projects 
  • How to internally leverage the WACC on each strip 

 

Managing Interest Risk  

  • Enterprise ALM for project structures
  • How to model interest rate scenarios
  • Protect investments and reduce interest rate risk   
  • SWAPS, IRO's, FRA's for Interest and Currency 

 

How to evaluate parametrically project risk  

  • How to evaulate project risk
  • Build up a project Value at Risk model 
  • What is the true cost for project risk 
  • How to reduce the risk price and the project discount 

 

How to re-leverage projects

  • Methods for re-leveraging projects reduce time-to-market
  • How to take advantage of floating equity prices and interest rates 
  • What are the key mechanisms for LBO's and MBO's 
  • What are the risks with leverage and how to measure them