The overarching aim of the course is to make delegates step back from the detail of day-to-day ratio calculations and the administration of the details of credit to look at the broader macro, industrial and structural issues which together contribute to a company’s credit profile and which define the company’s ability to compete profitably and so define its credit risk.
Over the three days we will review the core disciplines involved in corporate credit analysis – namely management and business risk analysis; understanding financial risk and leverage; understanding the impact of corporate structure and security on probability of default and recovery rates; the rating agency rating scales, and the impact of sovereign risk, parental support and liquidity analysis on the final rating. Delegates will carry out a series of analytical exercises and case studies and develop a rating of a listed but unrated case study company.
At the end of the course, delegates will:
- have a clear structured, consistent analytical framework and set of analytical tools to apply to day-to-day credit analysis;
- understand the importance of comparative strategy and business analysis;
- have a clear understanding of the importance of strategy in establishing the framework for credit quality and a strong understanding of the leading indicators of corporate failure;
- be able to effectively interface with management at investee companies and involve them in proactively and critically assessing management and the board’s composition and effectiveness; and
- be able to constructively participate in documentation and structuring dialog.
WHO SHOULD ATTEND?
- Credit analysts
- Debt fund managers
- Trainee bond and credit analysts
- Investment professionals
- Finance directors
- New entrants
- HR and training
- Finance and accounting
- Strategy analysis – a framework and toolkit
- Assessing management – what does good and bad management look like? How distinct are the challenges management face?
- Ratio analysis – what core metrics drive ratings? What ratios give us insight into competitive strength?
- Rating Agency methodologies – an overview, how can we replicate?
- Financial metric normalisation – key adjustments for leases, pensions, JVs and associates
- Corporate structure – subordination, security and other credit enhancements – what is their impact?
- Covenants – who benefits from them? What are they worth in terms of improving recovery? Are all covenants equal in bonds and loans?
- Liquidity benchmarking – a consistent and transparent approach to adjusting for liquidity