Chapter 5: Corporate Debt Markets

In this section

• Investment-Grade vs. High-Yield Bonds
  Investment-Grade vs. High-Yield Bonds (CFA Level 1): Defining Investment-Grade and High-Yield, Credit Ratings and Classification, and Market Behavior and Liquidity. Key definitions, formulas, and exam tips.
• Secured vs. Unsecured Structures
  Secured vs. Unsecured Structures (CFA Level 1): Context within Corporate Debt Markets, Collateral Basics: Why It Matters, and Understanding Secured Debt. Key definitions, formulas, and exam tips.
• Credit Enhancements and Covenants
  Credit Enhancements and Covenants (CFA Level 1): Why Credit Enhancements Matter, How Enhancements Affect Bond Pricing and Yields, and Common Types of Credit Enhancements. Key definitions, formulas, and exam tips.
• Rating Agency Perspectives and Market Dynamics
  Rating Agency Perspectives and Market Dynamics (CFA Level 1): Role of Rating Agencies in Corporate Debt, Rating Process, and Lagging Indicators vs. Market Sentiment. Key definitions, formulas, and exam tips.
• Hybrid Corporate Debt (Convertible, Subordinated, and Tiered Instruments)
  Hybrid Corporate Debt (Convertible, Subordinated, and Tiered Instruments) (CFA Level 1): Key Features of Hybrid Debt and Convertible Bonds: Bond with an Equity Kicker. Key definitions, formulas, and exam tips.
• Financial vs. Non-Financial Corporate Issuance
  Financial vs. Non-Financial Corporate Issuance (CFA Level 1): Structural Distinctions, Regulatory Compliance and Capital Adequacy, and Credit Analysis Perspectives. Key definitions, formulas, and exam tips.
• Bankruptcy Processes and Debt Restructuring
  Bankruptcy Processes and Debt Restructuring (CFA Level 1): Bankruptcy Frameworks around the World, Reorganization vs. Liquidation, and Reorganization. Key definitions, formulas, and exam tips.
• Corporate Bond Issuance Lifecycles and Prospect Analysis
  Corporate Bond Issuance Lifecycles and Prospect Analysis (CFA Level 1): Preliminary Considerations: Assessing the Need and Timing, Underwriting and Structuring the Deal, and Offering Memorandum vs. Prospectus. Clear examples and common exam pitfalls.
• Shelf Registration and Medium-Term Notes (MTN) Programs
  Shelf Registration and Medium-Term Notes (MTN) Programs (CFA Level 1): Rationale for Shelf Registration, Why Shelf Registration Takes Center Stage, and Key Benefits. Key definitions, formulas, and exam tips.
• Changes in Corporate Bond Market Microstructure Post-Crisis
  Changes in Corporate Bond Market Microstructure Post-Crisis (CFA Level 1): Impact of Post-Crisis Regulatory Reforms and Electronification and the Bucking of Old Traditions. Key definitions, formulas, and exam tips.
• Corporate Governance Reforms and Debt Market Implications
  Corporate Governance Reforms and Debt Market Implications (CFA Level 1): Why Corporate Governance Matters for Bondholders and Key Governance Reforms and Their Relevance to Debt. Key definitions, formulas, and exam tips.
• Covenants in Leveraged Loan and High-Yield Bond Markets
  Covenants in Leveraged Loan and High-Yield Bond Markets (CFA Level 1): Distinguishing Leveraged Loans and High-Yield Bonds, Covenant Types: Maintenance vs. Incurrence, and Maintenance Covenants. Key definitions, formulas, and exam tips.
• Private Debt Markets and Direct Lending
  Private Debt Markets and Direct Lending (CFA Level 1): Nature of Private Debt vs Public Debt, Key Structures in Direct Lending, and Unitranche Loans. Key definitions, formulas, and exam tips.
• Trends in ESG Ratings and Corporate Bond Implications
  Trends in ESG Ratings and Corporate Bond Implications (CFA Level 1): Why ESG Ratings Matter in Corporate Debt Markets, Complementing Traditional Credit Analysis, and Relationship with Default Risk and Spread. Key definitions, formulas, and exam tips.
• Corporate Liability Management Exercises (Exchange Offers, Consent Solicitations)
  Corporate Liability Management Exercises (Exchange Offers, Consent Solicitations) (CFA Level 1): Definition and Rationale, Exchange Offers, and Motivations for Exchange Offers. Key definitions, formulas, and exam tips.
• The Role of Private Equity in Leveraged Finance
  The Role of Private Equity in Leveraged Finance (CFA Level 1): Defining Leveraged Finance in the Context of Private, LBO Fundamentals, and Capital Structures in LBO Deals. Key definitions, formulas, and exam tips.