Day 1 - Equity Capital Markets

Day 1 am - Overview of capital markets (1 hour)

We will discuss the 2 main types of financing available, debt and equity, with the aim of comparing debt and equity, and their impact on the company.  We will use a case study to aid analysis. 

We will also introduce debt products, by describing their typology, with the details to come in later sections

Key topics:

• Risk-reward for shareholders, dividends, owners of company, subordinated in claim
• Return on / cost of equity
• Risk-reward for debt creditors, interest, debt maturity, superiority of claim
• Tax shield on debt
• Return on / cost of debt
• Impact of different capital structures to be explored through case study / model
• General discussion on the current climate and impact on funding

Day 1 am & pm - Equities & ECM (3.5 hours)

We will drill down on the characteristics of equity.  We will focus on the life-cycle of equities, starting with the IPO, including the pros and cons of going public.  We will also look to the secondary market, including motivations of investors, as drivers of the cost of equity.  We will also take a look at follow-on placements, in particular rights issues.  We will assess share price and rights price.  We will use drill questions based on case studies throughout. 

Key topics: 

• Types of shares
• Initial public offering – company life cycle, pros & cons
• Initial public offering process – quick overview of process
• Follow-on placements & block trades
• Rights issues

Day 1 pm - Equity-linked (2.5 hours)

The aim of this session is to focus on convertible bonds and variations. We look at what they are and provide examples of companies who’ve issued them.  We focus on terminology, the pros and cons to issuers. The class will also look at accounting and modeling the convertible from issuance to conversion / maturity.  We will conclude by discussing other forms of CBs.

Key topics:

• Convertible bond terminology
• Pros and cons
• Accounting & modeling