Credit Risk Analysis PC- Virtual Series
Gain a solid grounding in credit risk fundamentals with the tools and techniques required to perform a credit analysis - utilizing analytical tools to project future performance. Prerequisite knowledge: Basic accounting
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To make it even easier to learn, you can finance your program through Affirm.
Loans offered through Affirm are available in the U.S. and Canada.
Module 1: Cash Flow Analysis
- Structure of the cash flow statement
- Sources and Uses
- Reconciliations including PP &E, Intangibles, Investments, Deferred Taxes, Long term debt, Minority interest and Equity
- Exercise: Participants will complete the cash flow for the selected company
Module 2: Historical Financial Analysis
- The Audit
- Review of historical patterns and industry performance
- Income Statement analysis
- Balance Sheet analysis
- Cash Flow analysis
- Exercise: Participants will work in small groups to complete the FYE analysis
Module 1: Off Balance Sheet Items
- Contingent liabilities
- Operating leases
- Debt of joint ventures and unconsolidated subsidiaries
- Guarantees
- Take-or-pay contracts and obligations under throughput and deficiency agreements
- Receivables that have been factored, transferred or securitized
- Contingent liabilities e.g. potential legal judgments or lawsuit settlements
Module 2: Additional Risks to Consider
- Financial guarantees
- Performance guarantees
- Ratings triggers
- Covenants
- Revenue recognition
- Unusual gains and losses
- Asset write-offs
- Swap exposures
- FX exposure
- Pension deficits
- Securitization
- Structural subordination
- Partnerships/SPVs
- Leases
- Environmental
- Product liability
- Exercise: Annual Reports: identifying and recognizing industry and company specific off-balance sheet risks
Module 3: Forecasting
- Building a forecast-framework and methodology
- Qualitative and quantitative factors
- Base, management, and downside cases
- Critical value drivers
- Analyzing results- assessing debt capacity, recommending financing alternatives, public versus private, quantifying results and drawing conclusions
- Exercise: Forecasting the critical value drivers for selected companies
Module 1: Structuring and Documentation
- Investment grade versus non-investment grade
- Holding company analysis
- Guarantees, Keepwells, LOMIs
- Collateral secured versus unsecured
- Liquidation analysis
- Borrowing base
- Covenants
- Subordination
- Exercise: Due diligence for selected case studies
Module 2: Derivatives
- Introduction
- What is credit risk
- Purpose of credit derivatives
- Market participants
- Role of regulators
- The Credit Default Family
- ISDA
- Description of vanilla vs. structured derivatives
- Total Return Swaps
- Characteristics
- Exercise
- Credit Default Swaps
- Characteristics
- Risks and Risk Management of Credit Derivatives
- Credit
- Operations
- Market
- Liquidity
- Legal
- Risk Management
Module 3: Presentations
- Participants will present the complete credit analysis for the selected company
Module 4: Desk Ready Skills Knowledge Check