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Accessing Leveraged Capital Markets – Part I

Issuing High Yield Bonds For levered companies that do not fit the investment grade bucket, there are still robust capital markets options available for debt issuance through the leveraged finance divisions of global investment banks. As discussed in other leveraged finance posts, a large suite of buyers invest in high yield bonds

Preferred Shares Primer

When investment bankers look at quick and dirty enterprise value calculations, they generally think: EV = Net Debt (Debt - Cash) + Equity In corporate finance theory, enterprise value includes all levels of the capital stack including preferred shares ('prefs"). Preferred shares are securities that are senior to common equity and generally pay

Introduction to Green Bonds

Debt Capital Markets - What is a Green Bond? Green bonds are debt securities that use the proceeds to fund sustainable and environmental-friendly projects. Given today's investor focus on environmental, social and governance (ESG) factors - whether for political reasons or other ethical considerations, green bonds can be very attractive bond issuances

What Makes a Good Leveraged Buyout (LBO) Candidate?

There is a routine answer to this question - a company with large stable free cash flows and low levels of debt. This is usually followed by: How Does an LBO Create Value for Financial Sponsors? Debt paydown, EBITDA growth and multiple expansion. Debt paydown/repayment is easy to understand - if an LBO

What is a Leveraged Buyout? Introduction to LBOs

When someone brings up an LBO, people immediately associate this with investment banking and private equity. LBOs are associated with very advanced financial modelling and students sometimes get scared when the concept comes up. In reality, while investment bankers do run LBO models on a very regular basis, it is one of

Introduction to High Yield Bonds

What Are High Yield Bonds? What separates investment grade and sub-investment grade? The answer is a designated credit rating by the mainstream credit rating agencies - Moody's, S&P and Fitch. Moody's is widely accepted to be the gold standard for rating agencies. The rating agencies will assign scores for corporates based on

Canadian M&A Roundup Q3 2018

Canadian M&A has seen a sharp increase in activity in the third quarter of 2018 with $152.4B in announced deals, an increase of 63.6% from Q3 2017 and 21.8% from Q2 2018. M&A Drivers Hostile bids Consolidation in mining Beverage companies entering the cannabis space Hostile Bids According to Reuters and data from