Advanced Corporate Credit Analysis

4 days 15-18 Oct 2018, London UK £4,195.00 + VAT* Download brochure Add to basket

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Overview

A 4-day training course with extensive case studies covering:

  • Advanced financial analysis, including calculating key credit ratios
  • Advanced financial modelling in Excel
  • Credit enhancement methods; creating cashflow ring-fencing structures; CLNs
  • Parent and subsidiary rating linkage; related party risks
  • Company valuation for acquisition finance and distressed situations
  • Deteriorating credits, potential and actual NPLs: warning signs and strategies for minimizing loss

COURSE BACKGROUND
During the financial crisis, many banks and other financial institutions lost billions of dollars due to their failure to analyse credit risks correctly. Even when financial institutions do not suffer direct financial losses due to default or market movements, they may be receiving an inadequate return for the risks involved. With leveraged instruments set to remain a standard part of corporate capital structures, in both the private and public markets, knowing how to analyse and minimize credit risk remains key to avoiding losses, maximising returns and limiting capital usage. This course introduces more advanced analytical and structuring techniques for assessing, limiting and offsetting credit risks.  This course does not extend to the analysis of banks, insurance companies or structured vehicles.

METHODOLOGY
The course combines formal theoretical instruction with frequent use of exercises and case studies. These are based on real situations and are designed to help delegates implement new practices and to learn from empirical experience. Delegates are expected to know how to use Excel. The course is practical and inter-active, with delegates encouraged to ask questions. The techniques taught are intended to be of immediate practical use in the workplace. The lecturer will be available throughout the duration of the course to offer additional help if required.

WHO SHOULD ATTEND?

  • Bank credit officers
  • Investment bankers
  • Management consultants
  • Bond credit analysts
  • Fixed income/credit traders
  • Fixed income/credit sales people
  • Fund managers
  • Treasurers
  • Compliance officers
  • Financial decision makers in corporations

Instructors

We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

London
Sarah Martin

Former Executive Director of CSFB and Lehman Brothers, the Course Director has spent seventeen years working as an investment banker in Europe and the US. She has principally worked in the credit markets and has experience of the US and European high grade and high yield markets, the European new issue markets, the Asian convertible bond markets and of corporate restructurings of distressed credits. She specialised in the telecoms sector and was closely involved in the structuring, raising and/or trading of bank and public debt for telecoms companies in many countries, including Europe, South Africa, Asia and Latin America. She also has extensive experience of corporate finance transactions, including mergers, disposals, privatisations, IPOs and capital raisings. Until 2003, she was an Executive Director at Lehman Brothers in Fixed Income Research in London, having also worked for CS First Boston and Kleinwort Benson. She now works on an independent basis advising the legal and private equity professions on credit analysis and company valuation. She has a degree in economics from the London School of Economics and stock exchange qualifications from London and New York.

Venue

London

Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date. If you need help booking accommodation for your visit to our training courses, please contact accommodation@euromoneylearningsolutions.com and one of our partners will help you get the best rate possible.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.

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We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Day 1

Advanced financial analysis, including calculating key credit ratios

Analysing the income statement

  • Adjusting for non-recurring, non-core earnings, discontinued items, operating leases, derivatives
  • Adjusting for joint-ventures/associates and NCI
  • Analysing EBITDAR, EBITDA, EBIT; pitfalls of using EBITDA or adjusted EBITDA
  • What constitutes finance expense, including expenses for derivatives and quasi debt
  • Ratio analysis: margins (gross, EBITDAR, EBITDA, EBIT, pre-tax, net), interest cover, basic and enhanced dividend cover

Analysing the cashflow statement

  • IFRC layout – operating cashflow, NWC, investment & financing
  • Reorganising the cashflow statement to show CADR
  • Differences between operating earnings and operating cashflow
  • Primary and secondary sources of debt repayment
  • Cashflow based lending vs asset based lending
  • Ratio analysis: Interest and investment coverage; debt service and debt repayment coverage, cash conversion ratios, dependence on external financing, cashflow based ROIC, dividend coverage

Analysing the balance sheet

  • The asset base and consolidation policies
  • What constitutes debt – derivatives & quasi-debt
  • Off balance sheet liabilities
  • Adjusting for securitised receivables, operating leases, vendor funding, recourse financing, contingent liabilities, letters of credit, performance guarantees, retiree benefit deficits
  • Liquidity analysis
  • NCI, joint ventures & equity accounting
  • Ratio analysis: leverage, liquidity, asset coverage, working capital, ROIC, ROE, asset turnover, Dupont analysis

Case studies of high yield and complex high grade accounts – to be agreed with Standard Bank

Day 2

Advanced financial modelling in Excel

  • Modelling amend and extend facilities
  • Modelling for a new capital structure eg following new shareholder value policies, leveraged buyouts, deleveraging
  • Modelling new loan features eg PIK toggles, amortizations, equity kickers


Loan structuring

Credit enhancement methods

Securitization

  • Typical structure and participants
  • Creating cashflow ring-fencing measures
  • Rating considerations

Credit linked notes

Case study of a major ring-fencing mechanism to give lenders additional protection

Parent and subsidiary rating linkage

  • Credit assessment of groups, the importance of ownership, analysing a group
  • Non-recourse projects eg associates and joint-ventures
  • Non-guaranteed subsidiaries
  • Captive finance subsidiaries
  • Fitch criteria for associates, j/vs, subsidiaries
  • S&P criteria for associates, j/vs, subsidiaries, captive finance subs

Sovereign risk

Importance of sovereign risk to corporate analysis

Sovereign debt

  • Sovereign composite issuance
  • Sovereign guaranteed debt
  • Sovereign partially-guaranteed debt


 

Day 3

Company valuation for acquisition finance and distressed situations

  • Why do bankers need to value companies
  • Background to company valuation – growth, ROIC, WACC etc
  • Enterprise value vs equity value
  • Multiple valuations – revenues, EBITDAR, EBITDA, EBIT, net income
  • DCF valuations
  • NAV/NBV valuations

Case studies to practice equity valuation and to cover the importance of equity valuations to lenders

Day 4

Non-performing loans and distressed debt

  • Background and definitions
  • Factors leading to NPLS and early warning signs
  • Options for restructuring and recovery – operational and capital restructurings
  • Modelling debt restructuring options for distressed firms

Case studies of distressed credits that survived and that went bankrupt

 

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product