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Executive Summary
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Objectives and Scope
Implied Credit Profile
Indicative Pricing Assessment
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DEBT TRANSFER PRICING  

Objectives and Scope

The following describes the overall objectives and Scope of Engagement for GCA in providing this service:

  • Become fully up-to-speed with the current financial and business performance of the Issuer, as well as its strategic direction as influenced by its Parent in its capacity as equity owner.
  • Become thoroughly briefed on the historical and projected financial and business condition of the Issuer, as well as thoroughly familiar with the assumptions used in the projections prepared by the Issuer.
  • Become thoroughly familiar with industry segment(s), business and financial strategies for the Issuer under historical, current and projected market conditions and its competitive advantages/challenges.
  • Become thoroughly familiar with details of any off balance sheet obligations of the Issuer. Principally, these would include the operating lease information that the rating agencies capitalize in their credit ratio analyses, guarantees and unfunded pension obligations.
  • Review rating agency methodology for qualitative and quantitative metrics that are used to evaluate the industry sector(s) and individual companies and incorporate, as appropriate, these factors into the assessment.
  • Review annual reports, recent capital markets prospectus or memoranda, and other relevant data, coupled with information gathered from in-person due diligence meetings and/or conference calls to discuss the business and financial performance and plan.
  • Review proposed documentation for the expected issue.
  • Review appropriate rated credit comparables as part of the Implied Credit Profile assessment.
  • Review all applicable capital markets transactions as they relate to the cost of current or future debt of the Issuer.
  • Prepare an Implied Credit Profile that provides a detailed explanation of how the Implied Credit Profile was determined.
  • Prepare an Indicative Pricing Assessment that provides a range of likely interest rate outcomes should the Issuer raise public or private debt for a given amount and term, employing covenants and structures appropriate for issuers of that Implied Credit Profile at that time in the market.
 
 
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