Principles of International Finance (30151)

Professor: Office: Office hours: Teaching assistant:

Linus Siming (linus.siming@unibocconi.it) Room 02-E2-04 in Via Rntgen building Wednesdays 09.00-11.00, email me in advance to book a slot Madina Karamysheva (madina.karamysheva@phd.unibocconi.it)

The aim of this course is to give a very broad picture about international finance management moving from the needs of the firm in terms of financing and corporate advisory services (demand-side approach) to the analysis of investment banking offerings (supply-side approach). The first part of the course covers crucial topics of corporate finance, such as the demand for equity and debt financing, and the market for corporate control (M&A). The second part focuses on the investment banks organizational structure and the products they offer such as M&A advisory services, issuance of equity, bonds and convertibles, and sales and trading. In addition, new, innovative Wall Street securities and advisory products will be reviewed. The whole structure of the course is applied, involves real-world examples and is oriented to develop capabilities to understand and use methodologies and practices used on global financial markets. Course Prerequisites: Knowledge of the basic topics covered in corporate finance and valuation courses, such as Bocconi courses 30017 and 30149 Required Books: Investment Banking, Hedge Funds and Private Equity: The New Paradigm, by David P. Stowell (2010, Academic Press, Elsevier Inc.) Principles of Corporate Finance, by Richard A. Brealey, Stewart C. Myers, Franklin Allen (McGraw-Hill Companies) Non-required Book (Just for fun): Monkey Business: Swinging Through the Wall Street Jungle, by John Rolfe and Peter Troob, (Business Plus) Grading: Final exam 1.5 hours Closed book Multiple choice questions and open questions

COURSE CONTENT SUMMARY BMA: indicates the relevant chapters in the 10th edition of Principles of Corporate Finance S: indicates the relevant chapters in Investment Banks, Hedge Funds and Private Equity: The New Paradigm Part One (Corporate Finance) 1. Demand for financing (BMA: 14, 15): Demand for equity Demand for debt 2. Mergers, corporate control and governance (BMA: 31, 33): Mergers Corporate control and governance Part Two (Investment Banking) 1. Financial markets and the interaction between firms and investment banks (S: I1, III-1): The business system of investment banking Case study discussion: Rise and fall of Bear Sterns 2. Regulation and supervision of investment banking activities: (S: I-2, III-2): Overview of regulation in US, UK, Japan and China Case study discussion: A Brave New World 3. Corporate lending activity (S: I-3): Medium and long term financing and planning of debt Different sell-side processes Techniques of syndication 4. Capital markets (S: I-8, II-13, III-3): Underwriting and selling bonds and equities in domestic and international markets IPO and follow-on equity offerings Convertibles and debt transactions Public versus private equity Euromarkets Case study discussion: Freeport-McMoRan, financing an acquisition 5. Corporate finance services (S: I-4, III-4): Advisory & arranging in M&A Cross-border M&A M&A in Japan and Emerging markets (Russia, Brazil, India, China) Case study discussion: ServiceCo Advisory & arranging in corporate restructuring deals Advisory services for corporate governance Case study discussion: Procter and Gambles acquisition of Gillette 6. Other investment banking activities (S: I-5, I-6): Sales,Trading Asset management Research Wall Street innovations

Lecture 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Date 13/2 16/2 20/2 23/2 27/2 1/3 5/3 8/3 12/3 15/3 19/3 22/3 23/4 26/4 3/5 7/5 10/5 14/5 17/5 21/5 24/5 28/5 31/5 4/6 11/6 9/7 10/9

Topic Course introduction. Corporate financing overview Security issuance overview Market for corporate control Market for corporate control, international perspective Overview of investment banking Case discussion: Investment banking in 2008: Rise and fall of the bear Regulation of the investment banking industry in US, UK, Japan and China Case discussion: Investment banking in 2008: A brave new world case Financings for corporate and government clients Financings for corporate and government clients continued Case discussion: Freeport-McMoRan case: financing an acquisition Advising in mergers and acquisitions Advising in mergers and acquisitions continued Case discussion: Case: Procter & Gambles acquisition of Gillette Sales and Trading Sales and Trading continued Case discussion: A tale of two hedge funds: Magnetar and Peloton Case discussion: Kmart, Sears, and ESL: how a hedge fund became one of the worlds largest retailers Asset management, wealth management, research Credit rating agencies, exchanges, clearing and settlement Investment banking in an international perspective Wall Street innovations Recent developments and current issues Review session Exam Exam Exam

Reading BMA: Ch.14 BMA: Ch.15 BMA: Ch. 31 BMA: Ch. 33 Stowell: Ch. 1 Stowell: Case 1 Stowell: Ch. 2 Stowell: Case 2 Stowell: Ch. 3 Stowell: Ch. 3 Stowell: Case 3 Stowell: Ch.4 Stowell: Ch.4 Stowell: Case 4 Stowell: Ch. 5 Stowell: Ch. 5 Stowell: Case 5 Stowell: Case 6 Stowell: Ch. 6 Stowell: Ch. 7 Stowell: Ch. 8 Stowell: Ch. 9 Stowell: Ch. 10 -

All classes are held in Aula Perego