Credit Derivatives - Online

Credit has always been the most intractable of the financial risks to manage. The application of derivative risk management technology to credit risk has resulted in making credit derivatives a rapidly growing market segment with a high rate of innovation. This course guides participants through the characteristics and mechanics of credit derivative products being created. It focuses on the their creation, need, and evaluation.

This is an online self study course that can be globally accessed 24/7 from any internet enabled computer. Access is for 91 days. Certificates with earned credits will be awarded upon successful completion.

Available TodayOnlineUSD$400
Instructional Method:
Self-Study
Level: Basic

CEU CREDITSICB CREDITSICPAS CREDITS
2912.7510.5
Treasury managers, credit analysts, and financial analysts, traders.
Students will be able to:
  • Define credit risk
  • Identify features of total return swaps and credit defaults
  • Examine how credit derivatives are used by financial institutions in their hedging strategies
  • Evaluate how credit derivatives give rise to market, credit, legal and operational risks
  • Define what minimum risk management practices banks should have in place for the use of credit derivatives
Derivative instruments - Online or basic understanding of derivative contracts.
"The course was very helpful, and I learned a good deal about credit derivatives."
  • Corporate Credit Analysis - Online
  • Credit Risk Modeling - Online
  • Credit Analysis - Online
  • Counterparty Credit Risk - Online
    • Overview of Credit Derivatives
    This module familiarizes the user with:
    • Credit derivatives market
    • Basic instrument types of credit derivatives
    • Its main applications
    • Pricing and regulatory issues
    Duration: 2 Hours

    Credit Risk
    This module is an introduction to the concept of credit risk, which is basic to the understanding of credit derivatives. It includes:
    • Basics of credit risk
    • Quantitative measurement techniques
    • Pricing of credit risk
    • Comparison of models for credit risk
    • Applications of Credit Derivatives
    Duration: 1.5 Hours

    Credit Rating Dynamics
    Topics covered include:
    • Rating process from the perspective of major rating agencies
    • Analysis of implications for credit derivatives
    • Analysis of risks involved
    Duration: 1.5 Hours

    Emerging Markets
    This module updates the user on the development of credit derivatives in emerging markets. It covers the following:
    • Status of credit derivatives market within emerging markets
    • Risks involved in emerging markets and how credit derivatives can alleviate them
    • A few credit derivative structures in an emerging market framework
    Duration: 1.5 Hours

    Classic Credit Derivatives
    This module gives a description of the classic structures of credit derivatives. It explains the following structures:
    • Credit Guarantees
    • Revolving Credit
    • Repos
    • Asset Swaps
    Duration: 1 Hour

    Total Return Swaps
    Topics covered include:
    • Basic structure of total return swap agreements
    • Various applications of such instrument
    • Benefits to various parties
    • Issues affecting bank regulatory capital
    • Pricing related issues
    Duration: 1 Hour

    Structured Notes
    This module provides an introduction to Credit Linked Notes. It helps the user understand:
    • Need, nature and types of Credit-linked Notes
    • Structures and advantages
    • Unique features of these structures
    • Variations possible from the basic structure
    Duration: 1 Hour

    Repackaged Notes
    This module enables the user to understand:
    • Concept of repackaged notes
    • Comparison with other structures
    • Structures an designs
    • arious strategies adopted for repackaging
    Duration: 1 Hour

    Credit Portfolio Securitization Structures
    This module provides details of various credit portfolio securitization structures. It helps the user understand:
    • Nature and types of collateralized bond and loan obligations
    • Differences among them
    • Synthetic structures
    • Key areas of risk
    • Regulatory capital issues
    Duration: 1 Hour

    Case Studies for CPSS
    This module discusses the following case studies for credit portfolio securitization structures:
    • Rose
    • Nations Bank Commercial Loan Master Trust
    • CORE
    • Glacier
    • BISTRO (Broad Index Secured Trust Offering)
    • Eisberg Finance Ltd.
    • C Star
    Duration: 2 Hours

    Credit Default Swaps
    Topics covered include:
    • Main features of credit default swaps
    • Pricing issues
    • Various structure types
    • Uses, advantages and disadvantages
    Duration: 1.5 Hours

    Case Studies for Credit Default Swaps
    This module discusses case studies related to credit default swaps. These include:
    • H.K Synthetic Deal
    • The Fourth Promise Securitization Programme
    Duration: 1.5 Hours

    Credit Spread Options
    Topics covered include:
    • Basics of Credit Spread options
    • Credit Spread Puts
    • Credit Spread Calls
    • Credit Spread Collars
    • Credit Spread Forwards
    Duration: 1 Hour

    Bank and Institutional Applications
    This module discusses the application of credit derivatives for active management of bank loan portfolio. It helps the user understand:
    • Credit Portfolio Management through Credit Derivatives
    • Portfolio Credit Default Swaps
    • Synthetic Securitization
    • A case study – BISTRO (Broad Index Secured Trust Offering)
    Duration: 1 Hour

    Investor Applications
    This module discusses various investment applications of credit derivatives. It covers the following:
    • Creating synthetic credit exposure resembling a corporate bond
    • Credit overlays and their use
    • Leverage in credit derivatives
    • Creating structures with desired risk profiles
    Duration: 1 Hour

    Corporate Applications
    This module discusses the applications of credit derivatives for corporates. It covers the following:
    • Existence of credit risk in corporate portfolio
    • Uses of credit derivatives as a tool for transferring credit risk
    • Present users of credit risk
    Duration: 1 Hour

    Pricing Credit Derivative Instruments
    This module describes in brief the techniques used for pricing credit derivatives. It helps the user understand:
    • Theoretical models for pricing credit derivatives
    • Pricing of default swaps
    • Asset swap approach
    • Pricing of credit spread options
    Duration: 1 Hour

    Risk involved in Credit Derivatives
    This module discusses various risks involved in using credit derivatives like:
    • Credit risk
    • Reputation risk
    • Liquidity risk
    • Transaction risk
    • Compliance risk
    • Legal and regulatory risk
    • Counterparty risk
    • Pricing risk
    • Principles of risk management
    Duration: 1 Hour

    Documentation
    This module discusses the issues related to documentation in credit derivatives. It covers the following:
    • ISDA and The Master Agreement
    • ISDA objectives and benefits of standard documentation
    • Definitions in line with ISDA Documentation
    • Applicability of Credit Definitions
    Duration: 1 hour

    Regulations
    This module details various regulations related to credit derivatives. It helps the user understand :
    • Regulations related to both funded and unfunded credit derivatives
    • Treatment of credit derivatives in the trading book
    • The New Capital Adequacy Framework
    • Variations in the treatment of specific issues in different jurisdictions
    Duration: 1.5 Hours

    Legal Issues
    This module helps the user understand:
    • Evolving legal issues concerning credit derivatives
    • Applicability of some statutory laws to credit derivative transactions
    • How related legal aspects are dealt with in the U.S. and three European nations
    Duration: 1.5 Hours

    Accounting
    This module gives an introduction to the general accounting principles for credit derivatives. It covers the following:
    • General principles of derivatives accounting under FAS 133
    • Accounting for Credit Derivatives using Fair-Value Hedge Accounting
    • Accounting for Credit Derivatives using Cash Flow Hedge Accounting
    • Examples of Total Return Swaps and Credit Default Swaps
    Duration: 1 Hour

    Taxation
    This module discusses the US federal income tax considerations of:
    • Total return swaps
    • Default swaps
    • Credit-linked notes
    • Credit Spread Options
    Duration: 1 Hour

    Job Aids & Take Aways
    • Disclosures
    • Regulations
    • Financial calculators
    • Policy Template
    • Benchmarking Template

                                Powered by KESDEE, Inc.