Debt Modelling (with LBO)

• You will learn how to construct a debt cash flow model in the context of an LBO transaction, which is crucial for financial analysis and transaction evaluation.
• You will gain skills in determining the Internal Rate of Return (IRR) and conducting a sensitivity analysis, allowing you to better understand the impact of different scenarios on the transaction.
• You will learn financial modelling best practice and techniques for working with LBO debt inputs and constraints, which will improve the quality and efficiency of your modelling.
• The course provides a practical approach to debt modelling using Excel functions, which is essential for solving specific debt problems.

English

intermediate

• For finance professionals who need to create, analyse and interpret cash flow models.
• For those working in the field of LBO (Leveraged Buyout) transactions, but also for those involved in other forms of debt modelling.
• For those with a basic knowledge of Excel. If you are not already familiar with the programme, we encourage you to complete it first to get the maximum benefit from this course.

Key features of an LBO transaction: Length of investment; Exit routes – Initial Public Offering (IPO), trade sale, secondary buyout, liquidation; Cash generation and profitability growth of business being acquired; Source, length and credibility of forecasts; Finance mix.

Creating the operating model: Forecasting the operations of the business; Sales, EBITDA and working capital; Capex and depreciation.

Sources and uses of funds: Uses of funds (Equity acquisition, Refinanced debt, Fees); Sources (Debt capacity constraints, Senior tranches, Mezzanine).

Building the debt schedules: Circularity issues, Capital repayment options, PIK interest, Revolver, Cash sweep, Cash flow waterfall

Tax: EBIT vs PBT; Tax treatment of interest.

Equity return: IRR; Cash/money multiple.

Sensitivity analysis

• In order to use the course effectively, it is necessary, in addition to viewing the online training, to have Excel turned on. To do this, we recommend using a second screen or an additional device to avoid constantly switching between windows.
• The course is based on Excel for Windows, it is recommended to use version 2010 or later.
• MAC users are welcome to attend the course, but some features may differ from the Windows version. The tutor will adapt the course content to the MAC version during the course if there are MAC users attending the training.