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| Introduction | |
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| Common Leveraged Finance Terms | |
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| General Terms | |
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| Yield and Spread Definitions | |
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| Questions | |
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| Defining the Market and the Ratings Agencies | |
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| The Participants | |
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| The Issuers | |
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| The Sell Side | |
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| The Buy Side | |
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| Private Equity | |
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| Why Is Leveraged Finance Analysis Unique? | |
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| The Major Components of Analysis | |
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| The Components | |
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| A Pragmatic Point on the Various Aspects of Analysis | |
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| Some Features of Bank Loans | |
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| Questions | |
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| A Primer on Prices, Yields, and Spreads | |
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| The Basics | |
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| A Few Points on Yields | |
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| A Few Points on Spreads | |
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| Bank Loan Coupons | |
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| Duration | |
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| Total Returns | |
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| Deferred Payment Bonds: Prices and Yields | |
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| A Pragmatic Point on Terminology | |
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| Questions | |
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| A Primer on Key Points of Financial Statement Analysis | |
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| EBITDA | |
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| Capital Expenditures | |
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| Interest Expenses | |
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| Taxes | |
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| Changes in Working Capital | |
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| Free Cash Flow | |
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| The Balance Sheet | |
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| A Pragmatic Point on Financial Statements | |
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| Questions | |
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| Credit Ratios | |
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| EBITDA/Interest Ratio | |
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| Debt/EBITDA | |
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| A Pragmatic Point on the Leverage Ratio | |
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| A Pragmatic Point on Valuations | |
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| Free Cash Flow Ratios | |
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| Changes in Working Capital | |
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| Dividends | |
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| Acquisitions | |
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| One-Time Charges | |
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| The FCF/Debt Ratio | |
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| A Pragmatic Point on Free Cash Flow | |
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| Questions | |
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| Business Trend Analysis and Operational Ratios | |
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| Business Trends | |
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| Margins and Expenses | |
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| Capital Expenditures | |
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| Questions | |
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| Expectations, Modeling, and Scenarios | |
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| Sales and Revenue | |
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| A Full Model | |
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| Scenarios | |
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| A Pragmatic Point on Bank Maintenance Covenants and Expectations | |
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| Questions | |
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| Structural Issues: Coupons | |
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| Loan Coupons | |
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| Bond Coupons | |
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| Zero and Zero-Step Coupons | |
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| How the Coupon Is Determined | |
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| Modeling Changes in Coupons | |
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| Questions | |
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| Structural Issues: Maturities, Calls, and Puts | |
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| Maturities | |
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| Calls | |
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| Clawback | |
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| 10% Call | |
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| Cash Flow Sweeps | |
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| AHYDO | |
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| Other Bank Prepayments | |
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| Open-Market Repurchases | |
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| A Pragmatic Point on Early Refinancing of Debt | |
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| Questions | |
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| Structural Issues: Ranking of Debt | |
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| Ranking | |
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| Structural Subordination | |
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| Subsidiary Guarantees | |
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| Questions | |
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| Key Leveraged Finance Covenants | |
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| Debt Incurrence | |
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| Defined Terms and Carve-outs | |
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| Defined Term Examples | |
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| Carve-outs | |
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| Restricted Payments | |
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| Change of Control | |
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| Asset Sale | |
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| Reporting Requirements | |
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| Other Covenants | |
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| Affirmative/Maintenance Covenants | |
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| Restricted and Unrestricted Groups | |
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| Questions | |
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| Amendments, Waivers, and Consents | |
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| Questions | |
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| Making Money or Losing It Off of News Events | |
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| Scenario: An Issuer Makes an Acquisition | |
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| FastFoodCo (FFC) Facts | |
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| GoodFoodCo (GFC) Facts | |
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| Deal Facts | |
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| Scenario: The Issuer Gets Bought | |
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| Scenario: An Issuer Announces an IPO | |
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| Scenario: An Issuer Is Facing a Maturity | |
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| A Pragmatic Point on the Blended Price to Retire Debt | |
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| Questions | |
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| Management and Ownership | |
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| I'm Looking at Debt, So Why Does Equity Matter? | |
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| Valuation | |
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| Monitoring Equities | |
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| Questions | |
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| Value, Relative Value, and Comparable Analysis | |
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| Questions | |
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| New Issuance | |
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| Distressed Credits, Bankruptcy, and Distressed Exchanges | |
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| Claims | |
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| Classes of Claims | |
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| Subordination | |
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| Claims Arising from Bankruptcy | |
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| Valuing the Enterprise | |
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| Sale or Restructuring | |
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| Restructuring Without Bankruptcy | |
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| A Few Pragmatic Points on Bankruptcy Reorganizations | |
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| Questions | |
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| Preparing a Credit Snapshot | |
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| The Investment Decision Process | |
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| A Sample Investment Process | |
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| Big-Picture Items | |
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| The Company | |
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| Credit Fundamentals | |
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| Event Analysis | |
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| Security Analysis | |
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| Relative Value and Return | |
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| The Decision | |
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| Some Investment Traps | |
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| Closing Comments | |
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| Answers | |
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| Index | |