Corporate Credit Workshop

FitchTraining
London, United Kingdom

Course Format: Classroom | E-learning | Virtual Class | Online | On-site | Blended | Self-paced

Course Description:

'' A five day workshop to build analytic skills, using a structured and systematic approach to evaluate the credit standing of a company and the relative attractiveness of the risk ~ return profile of the investing/lending proposition.

Content
ANALYTIC OVERVIEW
Quantifying credit risk
Cost of credit - probability of default and loss given default
Credit charges - expected loss at different rating levels
Migration risk - focusing on the credits with the highest risk of migration
Structured approach to analysis
Rating agency approach to credit - issue and issuer
A framework for credit assessment - purpose, payback, risks and structure
Purpose- identifying the borrower and use of funds
Payback- linking credit assessment to primary and secondary sources of repayment
Risks to repayment- the need for a sector and company analysis to evaluate debt servicing ability
Structure- assessing the ability of the debt to meet the commercial needs of a company while protecting lenders�interest
Market indicators of credit risk
Market indicators as early warning signals of refinancing risk
Credit Ratings - rating trend and outlook
Debt market - bond spreads versus rating curves
Equity signals - share price movements and key multiples
RISK I: MACRO CONSIDERATIONS
The operating environment
Impact of key macro variables on company performance
Cyclicality - economic, commodity, technology etc.
Social and political considerations
Government regulations, taxation and licensing requirements
Sector
Understanding the structure of an industry and the key players operating within it
Growth dynamics and potential of a sector
Competitive forces - using the Porter Model to assess sector profitability
Evaluating and quantifying main industry risks
Key sector financial drivers - expectations for sales growth, operating profit margins, working capital requirements, and capital expenditure needs
Critical success factors and a company’s ability to sustain a competitive advantage in the future
RISK II: COMMERCIAL VIABILITY
Business strategy and earnings dynamics
Understanding a company’s business dynamics and market strategy to anticipate how these are likely to be reflected in their financial statements.
Key ratio and cash flow benchmarks for evaluating earnings and operating cash flow
Assessing the strategic direction of the firm - sales and operating profitability, sources of operating cash flow, trend and peer analysis
Accounting considerations - impact of IFRS, potential accounting distortions
Methods of evaluating overall performance - ROE, economic value added and market indicators such as total shareholder return and enterprise value/EBITDA
Quantifying performance looking beyond EBITDA - defining, calculating and using operating cash flow to analyse profitability
Forecasting and sensitising key variables - sales, EBITDA and non operating earnings
Asset investment
Using the business conversion cycle to create expectations about balance sheet and income statement performance of companies in the same sector
Key ratio and cash flow indicators to evaluate asset efficiency and estimate free cash flow
Use of peer analysis and industry bench-marks to assess and compare performance
Forecasting and sensitising key variables - working capital and capital expenditure
RISK III: FINANCIAL RISK
Financial strategy
Using business risk to gauge the appropriate level of financial risk
Understanding corporate treasury objectives - tenor matching, funding and liquidity needs
Analysing target capital structures - the effect of leverage on shareholder returns
Financial flexibility and liquidity
Refinancing risk - evaluating payment readiness, contingency liquidity and maturity profile of debt
Determining financial flexibility - measuring liquidity - ratio and cash flow tools.
Understanding financial risk in financial instruments used
Solvency and debt service capability
Key ratio and cash flow benchmarks for evaluating solvency and debt servicing ability
Defining, measuring and evaluating solvency using ratios and the cash flow statement
Using rating medians to benchmark a company’s financial standing
Using cash flow forecasts to assess debt service capability
Assessing debt capacity based on present value of cash flow available for debt service
RISK IV: MANAGEMENT AND SHAREHOLDERS
Management competence - what are we looking for, how is it measured?
Corporate aims and goals - their effect on the company’s future creditworthiness
Evaluating shareholder support and influence
STRUCTURE
Assessing the structure of the transaction - debt, ranking, safeguards and pricing
Debt profile - assessing the appropriateness of the structure in terms of amount, currency and maturity
Ranking - understanding different ways subordination can be achieved
Safeguards - the use of covenants and other techniques to mitigate risk
Credit pricing - evaluating the risk ~ return profile of the transaction.
...''

Phone:+ 44 (0) 20 7201 2770

School Address:

28 Headfort Place, London, SW1X 7DH, United Kingdom.


Jobs & Resumes: London
Houses & Roommates: London
Travel Agencies: London

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