Home > Store > Finance & Investing > Investing
Pragmatist's Guide to Leveraged Finance, A: Credit Analysis for Bonds and Bank Debt
- By Robert Kricheff
- Published Feb 24, 2012 by FT Press. Part of the Applied Corporate Finance series.
- Copyright 2012
- Dimensions: 6" x 9"
- Pages: 288
- Edition: 1st
- Book
- ISBN-10: 0-13-285523-2
- ISBN-13: 978-0-13-285523-5
Register your product to gain access to bonus material or receive a coupon.
Product Author Bios
Bob Kricheff, (New York City) managing director at Credit Suisse, has 20+ years of experience in leveraged finance analysis for bonds, bank debt and CDS. He was ranked as a top analyst by Institutional Investor Magazine, has overseen emerging market and European bond research; and ran Leveraged Finance Strategy and Portfolio Analysis. He regularly trains analysts out of college and presents to training classes, while publishing over 100 reports per year and speaking at investment conferences throughout the US and Europe. He holds a BA from New York University in Economics and Journalism, and a MSc from the University of London in Financial Economics.
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.
|
5 of 5 people found the following review helpful
Extremely pragmatic, By
This review is from: A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt (Applied Corporate Finance) (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
The first thing to know about this book is the title is completely honest. This is a "pragmatist's" guide, there is zero theory, zero context, just clear instruction on how to do the job of evaluating and managing high yield bonds and tradable bank loans. There is no mention of models of interest rate evolution, option adjusted spread, quantitative models of credit, credit derivatives or statistical analysis. The author assumes you will do your analysis by typing formulae into a spreadsheet: no Bloomberg, no Monte Carlo package, no Python code; and no mention of things like sensitivity analysis, documentation or testing. If you want that sort of thing, you will do much better with Quantitative Credit Portfolio Management,...
Read more
2 of 2 people found the following review helpful
Exactly as advertised,
Amazon Verified Purchase(What's this?)
This review is from: A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt (Applied Corporate Finance) (Hardcover)
I am a senior analyst in a buy-side leveraged finance shop and believe the book does a great job of outlining the process of credit analysis and bond assessment for the junior analyst. I read the book to see whether it made sense as a training tool for our new junior analysts and I believe strongly that it does. In addition, while I didn't think I was the target market, I found the book to be an interesting read and a worthwhile look into the mental systems used by a long-time analyst. I definitely took away a few ideas on how I might alter my own procedures for the better. Mr Kricheff lays out the nuts and bolts of who the players are in the market, then moves on to the issuance of a new piece of debt and shows the new analyst what pieces of information are important to look for and even how to prioritize between different pieces of information. The book lays out the basics of what a bond is, how they are priced and how to analyze the structure of the security. He looks at how...
Read more
1 of 1 people found the following review helpful
Pragmatic indeed, By
Amazon Verified Purchase(What's this?)
This review is from: A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt (Applied Corporate Finance) (Kindle Edition)
Robert Kricheff gets down to the nuts and bolts of effective credit analysis. I have read other leveraged finance books that have been twice as long, but half as pragmatic. I high lighted plenty of good advice that I will reference in the future. Well worth the read.
|
Online Sample Chapter
A Pragmatist's Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt
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 81
The FCF/Debt Ratio 82
A Pragmatic Point on Free Cash Flow 82
Questions 84
Chapter 11 Business Trend Analysis and Operational Ratios 85
Business Trends 86
Margins and Expenses 88
Capital Expenditures 91
Questions 93
Chapter 12 Expectations, Modeling, and Scenarios 95
Sales and Revenue 96
A Full Model 99
Scenarios 108
A Pragmatic Point on Bank Maintenance Covenants and Expectations 110
Questions 112
Chapter 13 Structural Issues: Coupons 113
Loan Coupons 113
Bond Coupons 115
Zero and Zero-Step Coupons 115
How the Coupon Is Determined 121
Modeling Changes in Coupons 122
Questions 123
Chapter 14 Structural Issues: Maturities, Calls, and Puts 125
Maturities 125
Calls 126
Clawback 129
10% Call 130
Cash Flow Sweeps 131
AHYDO 132
Other Bank Prepayments 132
Open-Market Repurchases 133
A Pragmatic Point on Early Refinancing of Debt 134
Questions 136
Chapter 15 Structural Issues: Ranking of Debt 137
Ranking 138
Structural Subordination 141
Subsidiary Guarantees 145
Questions 148
Chapter 16 Key Leveraged Finance Covenants 149
Debt Incurrence 151
Defined Terms and Carve-outs 153
Defined Term Examples 154
Carve-outs 155
Restricted Payments 156
Change of Control 158
Asset Sale 160
Reporting Requirements 161
Other Covenants 162
Affirmative/Maintenance Covenants 163
Restricted and Unrestricted Groups 165
Questions 167
Chapter 17 Amendments, Waivers, and Consents 169
Questions 177
Chapter 18 Making Money or Losing It Off of News Events 179
Scenario: An Issuer Makes an Acquisition 180
FastFoodCo (FFC) Facts 180
GoodFoodCo (GFC) Facts 181
Deal Facts 181
Scenario: The Issuer Gets Bought 185
Scenario: An Issuer Announces an IPO 189
Scenario: An Issuer Is Facing a Maturity 192
A Pragmatic Point on the Blended Price to Retire Debt 194
Questions 195
Chapter 19 Management and Ownership 197
Chapter 20 I’m Looking at Debt, So Why Does Equity Matter 201
Valuation 201
Monitoring Equities 206
Questions 208
Chapter 21 Value, Relative Value, and Comparable Analysis 209
Questions 216
Chapter 22 New Issuance 217
Chapter 23 Distressed Credits, Bankruptcy, and Distressed
Exchanges 221
Claims 224
Classes of Claims 226
Subordination 227
Claims Arising from Bankruptcy 229
Valuing the Enterprise 230
Sale or Restructuring 231
Restructuring Without Bankruptcy 234
A Few Pragmatic Points on Bankruptcy Reorganizations 236
Questions 238
Chapter 24 Preparing a Credit Snapshot 239
Chapter 25 The Investment Decision Process 243
A Sample Investment Process 244
Big-Picture Items 245
The Company 245
Credit Fundamentals 246
Event Analysis 246
Security Analysis 247
Relative Value and Return 247
The Decision 247
Some Investment Traps 248
Chapter 26 Closing Comments 251
Answers 253
Index 259
Sample Pages
Download the sample pages (includes Chapter 1 and Index)
This book includes free shipping!
This book includes free shipping!
eBook (Watermarked)
$64.99
$51.99
Includes EPUB, MOBI, and PDF
About eBook Formats
This eBook includes the following formats, accessible from your Account page after purchase:
EPUBThe open industry format known for its reflowable content and usability on supported mobile devices.
MOBIThe eBook format compatible with the Amazon Kindle and Amazon Kindle applications.
PDFThe popular standard, used most often with the free Adobe® Reader® software.
This eBook requires no passwords or activation to read. We customize your eBook by discretely watermarking it with your name, making it uniquely yours.
- Request an Instructor or Media review copy.
- Corporate, Academic, and Employee Purchases
- International Buying Options
Get access to thousands of books and training videos about technology, professional development and digital media from more than 40 leading publishers, including Addison-Wesley, Prentice Hall, Cisco Press, IBM Press, O'Reilly Media, Wrox, Apress, and many more. If you continue your subscription after your 30-day trial, you can receive 30% off a monthly subscription to the Safari Library for up to 12 months. That's a total savings of $199.
