The document summarizes a guest lecture on corporate finance solutions and international market developments given at the University of Hong Kong on September 15, 2015. The lecture covered topics such as mergers and acquisitions, equity and debt capital markets, and recent trends, including record high global M&A volumes and increasing deal sizes in high yield debt markets. It also provided an overview of the Corporate Finance Association, its goals of fostering exchange and developing standards in corporate finance, and contact details for further information.

1. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Guest Lecture
“Corporate Finance: Solutions & International Market Developments”
University of Hong Kong – 15 September 2015, Dr. Ruediger Theiselmann

2. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
About corpfina
The Corporate Finance Association
(corpfina) e.V. was founded in 2013
as an international association to
• foster interdisciplinary exchange of the
international corporate finance
community across all sectors.
• further develop standards and early
address trends in corporate finance.
• foster new scientific and practical
findings in regards to corporate finance.
• intensify the dialogue between public,
politicians and international rule-setting
institutions regarding corporate finance.
Authori-
ties
Issuers /
Corporates
Banks /
Advisors
Analysts /
Media
Investors

3. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Strategic View on Corporate Finance
Corporate Strategy
Growth Restructurings
Organic Inorganic Financial Operational
• Private M&A
• Public Takeovers
• Distressed M&A
• New Ventures
• Joint Ventures
• Cooperations
• Processes
• Shut-downs
• Procurement
• (…)
• Strengthen Equity
• Adjust Debt
• Improve Cash Flow
• Divestments

4. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Core Areas of Corporate Finance
M&A
DCM Loans
DCM Bonds
ECM
- Transaction Management
- Valuation
- Take-over Defense / Unsolicited Offers
- Lending, i.e. Syndicated
Loans, Club Deals and
Private Placements
- Leveraged Finance
- Benchmark Bonds (Rated / Unrated)
- High Yield Bonds
- Hybrid Bonds
- Private Placements
- IPOs
- Follow-ons
- Convertibles
- Share Buy Backs

5. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Focus on M&A
Mergers & Acquisitions is inorganic growth (i.e. increasing output and business
reach) or downsizing through a share or asset deal.
Asset deal
- Purchase of objects
- All or selected assets of the target are being purchased
- Unusual for common transactions, standard for
distressed M&A, i.e. purchases out of insolvencies (all
assets are being purchased without any liabilities)
- Main advantages: not all assets and liabilities need to be
purchased, higher potential for write-offs for the buyer
- Main disadvantages: high complexity given that all
purchased assets have to be identified; transfer of
contracts requires consent of contracting partners
Share deal
- Purchase of rights
- All or selected shares of the target are being purchased
- Main advantages: Complexity significantly reduced
compared to asset deal (only transfer of shares); no
consent of contracting partners required; licenses / official
permissions don´t cease to exist
- Main disadvantages: Debt can´t be separeted and left
behind; company can only be purchased as a whole –
selection of certain assets impossible

6. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Focus on Equity Capital Markets
Equity is non-repayable capital, not interest-bearing and subordinated compared
to debt positions in case of the insolvency of the company/issuer.
IPO
Follow-on
Convertible
Equity-linked
note; listed bond can
or must be converted into
new shares at maturity
Increase of the
share capital
with or without
subscription rights
Issuance of shares
on the stock
markets for the first
time

7. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Focus on Debt Capital Markets
Debt is repayable capital, interest-bearing and senior compared to equity in case
of the issuer‘s/borrower‘s insolvency.
• Privately placed Bonds
• US Private Placements
• Euro Private
Placements
• German Schuldschein
• Unitranche Facilities
•Combination of debt
and equity elements
•Long tenors (up to 100
years)
•Subordinated debt and
interests
• Credit business based
on a loan agreement
• Club Deals (3-5 banks)
for small amounts
• Syndicated Loans for
huge transactions
• Leveraged Finance:
high yield, special risk
profile
• Listed debt securities
• Risk categories:
Investment Grade,
Cross-Over, High
Yield
• Rated/Unrated
Bonds Loans
OtherHybrid

8. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Focus on Financial Restructurings
Financial Restructurings improve the borrower‘s/issuer‘s financial situation
through adjustments of the balance sheet and cash flow reliefs.
New shareholder loans
Conversion of debt into equity
(Debt-Equity-Swap)
Management-Buy-In
New external shareholders (incl.
financial sponsors)
Additional contributions from
existing shareholders
Equity
Subordinated loans
Convertibles
Bonus shares
Silent partnerships
Mezzanine
Standstill Agreement
Bridge Financing
Restructuring Loans
Cancellation of debt with/without
clawback
Subordinaton of Debt
Payment in Kind
Letters of Comfort
Debt
Sale-and-Lease-back-solutions
Disposal of Real Estates to SPV
Factoring
Working Capital Management via SPV
On-Balance
Off-Balance
Major Objectives
Safeguard liquidity
Safeguard surviving
Valuation of the company
Disposal of (non-core) assets

9. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Recent International Market Developments
The Corporate Finance World Market has developed dynamically in 2015
so far, mainly driven by M&A*.
• Global M&A volume reached $3.0tr as of August 2015, the second fastest to the $3tr mark
on record, behind 2007 when it was reached on 23 July.
• Global high yield DCM average deal size stands at $587m as of August 2015, up 19% from
$493m (yoy), and the highest YTD average on record.
• Global corporate loans volume stood at $1.54tr in 1H 2015, down 18% on the $1.87tr
borrowed in 1H 2014 and was the lowest first half volume since 1H 2012.
*Source: Dealogic

10. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Discussion on Corporate Finance

11. Corporate Finance: Solutions & International Market Developments | University of Hong Kong, 15 September 2015
Contact Details & Disclaimer
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