Day One

Session 1
Introduction

• The credit route map - an overview of the corporate credit analysis process and the influences on a credit rating.
• The importance of qualitative and market indicators vs. quantitative financial analysis

Session 2
The risk analysis framework - qualitative risk assessment

• Understanding macroeconomic cycles
• Industry risk
• Assessing management risk and Corporate Governance issues

Session 3
The risk analysis framework - quantitative risk assessment – financial statements

• The main financial statements and their structure
• Accounting principles
• Accounting Standards – development of IAS and convergence of accounting standards

Session 4
Accounting vs. cash flow analysis

• Limitations of  and risks in relying on financial statements – Creative Accounting issues
• Cash flow statements – differing formats and approaches to analysis

Day Two

Session 5
The risk analysis framework - Quantitative Analysis – Ratios
Which ratios are used and why – the main ratios used for corporate credit assessment
Ratios used by equity investors vs. accounting based ratios
Some of the financial ratios used by Rating Agencies, and their approach to analysing corporate credit risk

Session 6
Risk mitigation techniques for corporate credit exposures
Financial covenants – what they are and how they are used?
Rating Triggers and their significance in terms of credit risk
Guarantees and credit enhancement
Collateral Support Agreements
Security

Session 7
Risk and return – pricing of credit risk

• Principles of risk and return
• Key elements of RAROC

Session 8
Credit portfolio models

• How credit risk is measured – overview of the principles of a credit risk management model; the concepts of Expected Default Frequencies,  Loss Given Default and Recovery Rates
• Implications of the credit crisis – regulators’ proposals for enhancing the Basle Capital Adequacy rules