Our free 90 minute short course "The Pitfalls of the Wrong Debt Structure" provides an in-depth examination of the risks and considerations involved in choosing the right debt arrangements for transactions. Participants will first delve into the various sources of debt, including Bank, Bond, Private Placement, and Export Credit Agency (ECA) financing, learning about the advantages and disadvantages associated with each option. The course will then address the importance of selecting the appropriate debt tenor for the underlying transaction, incorporating interactive elements such as participant voting to highlight differing perspectives between debt providers and equity holders on the most suitable term lengths.

Another critical topic covered is the decision of whether to hedge interest costs, where participants will explore the pros and cons of fixed versus floating interest rates. This section will clarify that while not all deals require hedging, some debt funders may prefer it to manage their risk or increase their returns. The course will also investigate covenants and warranties, discussing how they can either protect or create risk in a transaction.

Participants will learn to identify the most suitable covenants for different types of transactions and will again engage in voting to understand the varying levels of control debt providers might seek to impose, as well as the potential issues overly tight covenants can pose for equity holders and debt providers alike.

The course concludes with an emphasis on the importance of flexibility, underscoring that both debt providers and equity need to strike a balance that accommodates the interests of all parties involved in a transaction. This short, yet comprehensive overview equips participants with some key strategies to enable them to navigate the complexities of debt structuring effectively.