A core part of the course will deal with hands-on restructuring techniques, which will be simulated through a number of numerical exercises and case studies. To provide context for restructuring techniques we will cover best-practice in bank-internal organisation, and recent trends in regulation, bank supervision and insolvency law. Restructuring episodes from Europe and emerging markets will be studied. Investment in NPL portfolios and distressed debt will be covered, as this present new opportunities in both regions. The economics of private sector debt distress and policies used to address such debt crises, will round off our programme.
At the end of the course you will be fluent in engaging with supervisors, other insolvency professionals and with investors in complex distressed situations. You will be in a position to negotiate for instance in a creditor committee, or to navigate the court system in an insolvency. These will be key skills for your organisation in the coming years.
Unit 1: Course introduction, and the context for NPLs and private sector debt
- Private debt and NPLs after the COVID recession
- The context for NPL restructuring
Unit 2: Debt distress: the early warning indicators
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Arrears, default, and the NPL life cycle
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Corporate debt distress: setting up an early warning system
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Household over-indebtedness
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Descriptive portfolio statistics to track arrears
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Pre-default corrective action plans and loan forbearance
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State-sponsored borrower relief measures
Unit 3: Impairment and defaults: regulation and accounting practice
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Why bank asset quality definitions vary so widely
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Reporting problem loans
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Standards in the EU
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The accounting framework: IFRS and expected credit losses
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Integrating three perspectives on bad loans and flexibility in a recession
Unit 4: Supervision and NPL management
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Why supervisors care: high NPL banks are weak banks
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The response from supervisors: NPL guidelines from the ECB and European Banking Authority
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Best practice: the ECB guidance to banks on non-performing loans
Unit 5: Policies and institutions in NPL crisis
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Past debt crises in Asia and Europe
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Lessons from past crises
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Asset management companies
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Rules for state aid to banks
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Asset transfers and bank resolution
Unit 6: Insolvency regimes and asset recovery
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How the insolvency regime shapes creditor rights
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Elements of effective insolvency regimes
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Assessing insolvency regimes in practice
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Pre-insolvency restructuring in Europe
Unit 7: Out-of-court workouts
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The path to the out-of-court workout
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Organising multi-creditor workouts
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The restructuring plan
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Deciding between alternative options
Unit 8: Case studies of corporate restructuring and insolvency
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Case study no. 1: timely restructuring
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Case study no. 2: multi-creditor restructuring of a hotel group
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Case study no. 3: multi-creditor restructuring of an SME
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Case study no. 4: bankruptcy of an unviable company
Unit 9: Restructuring household loans and arrears management
Unit 10: Loan sales and securitisations
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Loan sales in the workout strategy
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The secondary loans markets in Europe and emerging markets
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The regulation of loan transfers and external servicing
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The distressed asset transfer process
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NPL securitisations
