Corporate Credit Analysis

3 days 9-11 Oct 2017, Hong Kong Hong Kong $4,490.00 Download brochure Add to basket

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Overview

Banks and other financial institutions lost billions of dollars due to their failure of 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 equity markets, knowing how to analyse credit risk remains key to avoiding losses and to maximising returns.

Objective

This 3-day course covers the major financial statement and ratio analysis, borrower due diligence, default and recovery analysis, loan structuring and credit proposal preparation so that participants can master all the essential credit, structuring and writing skills in analyzing the borrower risk and preparing an effective credit application.


Methodology

The 3-day course uses a combination of practical credit analysis framework based on the trainer’s 20-year banking and credit experience, actual recent Asian credit cases, as well as hand-on exercises to enhance the attendees’ knowledge and application of credit analysis.


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.

Hong Kong
Stan Ho


Dr. Stan Ho is an experienced investment banking and credit rating expert, with equity capital market and corporate finance experience in Credit Suisse, Merrill Lynch and Bear Stearns, where he worked on IPO, ADR listing and convertible bond offering for Non-Japan Asian issuers. Stan also worked as the Head of Non-Japan Asia structured finance group at Fitch Ratings, where he covered securitisation, bank covered bonds and REIT corporate rating for Non-Japan Asian issuers. Stan has over 18 years of banking and credit experience with focus on corporate credit, real estate investment and finance, and structured finance.

Stan is currently a Professor of Practice of the Department of Finance and Insurance at Lingnan University (LU), and an Adjunct Professor of the Department of Real Estate and Construction at the University of Hong Kong (HKU). He lectures on finance and real estate courses at LU, HKU and the Chinese University of Hong Kong (CUHK).
He also conducts training on various technical and soft skills for commercial banks, investment banks, regulators and corporates in Asia Pacific for Euromoney Learning Solutions.

Stan graduated with BBA in Information Systems at the Hong Kong University of Science and Technology, MBA from the University of Cambridge, and DBA from City University of Hong Kong.

Stan speaks English, Cantonese and Mandarin.

 


 

Venue

Hong Kong

4-5 Star Hotel in Hong Kong

All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.

Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

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.

inhouse-learn-more

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



Financial Statement Credit Analysis:

  • Understanding the purposes of Financial Statements
  • Analysing the Income Statements as the earning source for interest payment
  • Analysing the Balance Sheets as the asset source for principal payment
  • Analysing the Cash Flow Statements as the cash source for debt obligations
  • Analysing the Notes to Financial Statements
  • Limitation: Understanding the limitations of financial statement credit analysis
  • Exercise: Analysing the financial statements of a Hong Kong conglomerate borrower

Financial Ratio Credit Analysis:

  • Liquidity: Current ratio, quick ratio, cash ratio
  • Efficiency: Asset turnover, inventory turnover, account receivable turnover, account payable turnover
  • Leverage: Debt ratio, interest coverage
  • Profitability: Gross profit margin, net profit margin
  • Limitation: Understanding the limitations of financial ratio credit analysis
  • Exercise: Undertaking the ratio analysis for a Chinese property developer


Undertaking Borrower Due Diligence:

  • Corporate Identification 
  • Corporate Document Review
  • Corporate Source Verification
  • Corporate Business Objectives
  • Directors and Beneficial Owners



 

Day 2

 

Qualitative Analysis of Borrower Default Analysis:

  • Economic Environment
  • Operating Environment
  • Industry
  • Market Position
  • Management Quality
  • Corporate Governance
  • Legal and Regulatory Issues
  • Exercise: Undertaking qualitative analysis for a China conglomerate

Quantitative Analysis of Borrower Default Analysis:

  • Earning and Cash Flow
  • Liquidity
  • Efficiency
  • Leverage
  • Profitability
  • Financial Flexibility
  • Asset Quality
  • Exercise: Undertaking quantitative analysis for a China conglomerate


Recovery Analysis:

  • Estimating distressed enterprise value (going concern vs. liquidation approaches)
  • Estimating creditor claims
  • Distributing value
  • Exercise: Calculating the stressed recovery for a defaulted property developer

 

Analysing Group Structure:

  • Inter-company lending
  • Subordination (structural, contractual)
  • Limitations of guarantees and letters of comfort
  • Excessive use of SPVs in the corporate structure
  • Off balance sheet liabilities

Case Study: Structural subordination of Chinese offshore borrowing

Sovereign Impact on Corporate Credit Analysis:

  • Legal system
  • Law and security enforcement
  • Capital control

Case Study: Reviewing Malaysia capital control between 1998 and 2003



Day 3


Use of Accounting Techniques:

  • Capitalisation of costs and expenses
  • Lengthening of fixed asset useful life
  • Non-core financial gain
  • One-off exceptional gain
  • Property revaluation
  • Change of property nature
  • Sale of account receivables

Audit Problems:

  • Qualified audit opinions
  • Frequent change of auditors
  • Signing auditors in a different location than the company business and asset location


Structuring a Loan Facility:

  • Tenor
  • Interest Rate
  • Call Conditions
  • Conditions and Covenants
  • Collateral: Lien, Pledge, Assignment, Mortgage
  • Guarantee
  • Comfort Letter

Exercise: Structuring a loan facility for a China telecom equipment manufacturer

Preparing an Effective Credit Proposal:

  • Effective Tips for a Credit Proposal
  • Effective Credit Presentation Format
  • Streamlining Hints & Active vs Passive Voices

Exercise: Enhancing an existing credit proposal for a Hong Kong retailer

Drafting Loan and Bond Documentation:

  • Events of default
  • Effective covenants
  • Clarity of rights among different classes of creditors

Case Study: Reviewing Kaisa high yield bond prospectus

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