London School of Credit Analysis
£4,895 +VAT
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During the 5 days, two of the top credit specialists will take you through the regulations, rating agencies, cashflow, debt issues, corporate loan workouts and financial restructuring.

Course Instructors:

  • The course director has over 20 years' experience in lending to the business sector. Having worked in origination, credit and loan workout roles as a senior manager and consultant, he is uniquely qualified to deliver this programme. He is a consultant and trainer to the banking sector. With range of services including mentoring bankers in their day-to-day work and the provision of research services to support his clients' business expansion plans.
  • Formerly Lehman Brothers & Credit Suisse First Boston Credit Analyst & Company Valuation Specialist with over 17 years experience.

The global credit crisis has left many small, medium and even multinational companies faced with internal financial crisis as they try and sure-up the value of their assets, release liquidity as banks reduce their cash lines and look to the future by starving off further decline by assessing real growth areas. However an increasing number of borrowers are failing to meet their loan obligations.

Bankers lending to such troubled borrowers are often faced with a dilemma: enforcing liquidation which can provide certainty of a short term return but which can involve a significant loss of principal, or giving the borrower more time which adds yet more uncertainty to a risky recovery process. In tough liquidity conditions, such as today's global credit crunch, credit professionals are required to quickly identify what is causing borrowers problems and provide the most appropriate and cost effective financing solution. Such solutions can be unique to the sector in which the company operates and specialist knowledge may be required regarding leverage buyouts, corporate loan workouts and particularly immediate organisational financial restructuring. Access to credit and knowledge of how to implement relevant 'credit' strategies will be the key determining factor as to which companies survive this crisis.

How will this course assist you?

Over an intensive five days you will cover:

  • An overview of credit issues including regulations, rating agencies, cashflow, debt issues, corporate loan workouts and financial restructuring
  • Analyse credit risk to avoid losses
  • Address early warning signals and identify the causes of the borrower's problems
  • Use financial modelling with Excel for forecasting and credit analysis
  • Evaluate the various loan workout and restructuring options
  • Develop repayment programmes tailored to the borrower's operating cashflow
  • Identify which borrowers can be returned to viability, as opposed to those for whom a quick liquidation is the most realistic course

Who Should Attend?

  • Bankers in Loan Workout and Debt Management
  • Heads of Credit
  • Credit Risk Officers
  • Credit AnalystsRisk Managers
  • Senior Financial Analysts
  • Senior Lending OfficersLawyers

Day 1

Types of lending and credit ratings

  • The lending markets
  • Bank lending
  • The bond markets - high grade and high yield
  • Credit ratings
  • Rating scales and definitions
  • Recovery ratings
  • Relevance of sovereign ratings

Financial aspects of credit analysis (quantitative factors)

  • Analysis of historic results
  • The profit and loss account; adjusting for exceptionals
  • The cashflow statement; re-organising the cashflow statement
  • Earnings vs. cashflow
  • The balance sheet; debt maturity profile

Day 2

Analysis of historic results (continued)

  • Off balance sheet liabilities
  • Adjustments for operating leases
  • The importance of forecasting and of cashflow vs. assets
  • Ratios for credit analysis (leverage, liquidity, earnings and cash coverage, asset coverage, working capital, asset turnover)
  • Payback/debt servicing analysis

Case study: analysis of a listed retailer and listed property company

  • Assessing debt capacity
  • Accounting factors

Day 3

Modelling and forecasting in Excel

  • Creation of full financial forecasting models - simple and more complex
  • Creation of assumptions
  • Return analysis
  • Creation of covenant package
  • LBO model

Case studies: modelling with Excel of historic accounts, creation of forecasts, sensitivity analysis within one Excel file, calculation and analysis of ratios, creation of covenants. Creating a refinancing package for a cyclical company.

Business risk analysis (qualitative factors)

  • Sovereign
  • Economy, currency, credit rating, political risks
  • Industry
  • Porter’s five forces
  • Industry life cycle (growth)
  • Industry cyclicality (earnings quality)
  • Leading indicators
  • Competition
  • Pricing dynamics; demand vs. supply
  • Changing business environments
  • Regulation
  • Capital intensity and cost base

Case study: review credit of company in changing industry environment

  • Company specific
  • Management
  • Operating, capital and corporate finance strategies
  • Competitive advantages and cost position
  • Product/service offering, differentiation and pricing power
  • Diversification
  • Customer/supplier concentration
  • Structural factors
  • Shareholder structure
  • Ownership and support
  • Structural and contractual subordination
  • Impact of structural issues on ratings

Day 4

Leverage analysis

  • The advantages and disadvantages of leverage: debt vs. equity
  • Suitability for leverage
  • Determinants of leverage
  • Impact of shareholder value considerations on credit quality
  • Corporate structure and double leverage

Case study: evolution of BAA’s risk and financial profile and structure of borrowing

Risk limitation techniques, covenants, documentation, distressed credit situations

  • Purpose and structure of debt facilities
  • Documentation
  • Overview of a loan agreement
  • Overview of high grade and high yield bond prospectuses
  • Reps and warranties, conditions precedent, negative pledge MAC clauses, events of default, cross-default, equity cures etc
  • Focus on covenants - financial and non-financial covenants
  • Covenant definitions (financial), including off-balance sheet liabilities
  • Covenant definitions (non-financial) - what makes for stronger or weaker covenants
  • The 8 key covenants for event and recapitalisation risks

Pricing for bonds

Pricing for loans

Day 5

Impact of corporate finance transactions on credit quality; leveraged buyouts

  • Corporate finance transactions
  • Mergers, acquisitions, disposals, break-ups, demergers,LBOs, etc

Case studies: impact of M&A on credit quality

  • Leveraged buyouts
  • Rationale to LBOs
  • Structuring an LBO
  • Quick method of assessing LBO returns
  • Assessing returns to equity and subordinated lenders
  • Modelling an LBO

Distressed credits

  • Identifying the problems
  • Signs of business deterioration
  • Developing a revised business plan
  • Does the firm have a future?
  • Assessing recovery rates
  • Assessing the options: liquidation or administration/restructuring
  • Debt restructuring options
  • Renegotiation of terms: PIK, higher interest, extended Maturities, additional security, warrants, etc
  • Equity injection
  • Debt forgiveness
  • Debt for equity swap/warrants
  • Debt for debt swap
  • Discounted debt buybacks
  • Sale of entire company

Course summary and close

  • The course director has over 20 years' experience in lending to the business sector. Having worked in origination, credit and loan workout roles as a senior manager and consultant, he is uniquely qualified to deliver this programme. He is a consultant and trainer to the banking sector. With range of services including mentoring bankers in their day-to-day work and the provision of research services to support his clients' business expansion plans.

    Before becoming a consultant, the course director was Regional Director, Ireland for National Australia Bank Group's Corporate and Institutional Banking division. In 2001, he started this operation and in five years grew the business to become a recognised force in the Irish market. He was responsible for all aspects of the business, including new business development, credit proposals, workout of difficult credits and growing the team. He built significant client relationships in a wide range of sectors, including Energy and Utilities, Food, Aerospace, Healthcare and Real Estate.

    In 1996, The course instructor became Senior Adviser and Team Leader at Bank Gospodarki Zywnosciowej SA ("BGZ"), an integrated corporate and financial restructuring project financed by the UK Know-How Fund. Leading a multi-cultural team of banking, systems and loan workout consultants, he spearheaded the return to viability of significant customers of BGZ, leading financial restructurings under the auspices of the specialist legislation (including "compromise agreements" such as the Ugoda Bankowa).

    From 1994 to 1995, The course instructor was a Senior Manager for Lloyds TSB, responsible for credit sanctioning and resolution of problem loans for fifty branches in central London. In 1989, he was appointed to Lloyds' New York operation, which had encountered severe problems in its leveraged and structured finance book. He was responsible for engineering financial solutions and workouts for a wide range of midmarket customers. 

    The course director holds a Masters of Business Administration from Manchester Business School, and the Institute of Financial Services' Financial Studies and Banking Diplomas (both with Distinction).
  • Former Executive Director of CSFB and Lehman Brothers, the Course Director has spent seventeen years working as an investment banker in Europe and the US. She has principally worked in the credit markets and has experience of the US and European high grade and high yield markets, the European new issue markets, the Asian convertible bond markets and of corporate restructurings of distressed credits. She specialised in the telecoms sector and was closely involved in the structuring, raising and/or trading of bank and public debt for telecoms companies in many countries, including Europe, South Africa, Asia and Latin America. She also has extensive experience of corporate finance transactions, including mergers, disposals, privatisations, IPOs and capital raisings. Until 2003, she was an Executive Director at Lehman Brothers in Fixed Income Research in London, having also worked for CS First Boston and Kleinwort Benson. She now works on an independent basis advising the legal and private equity professions on credit analysis and company valuation. She has a degree in economics from the London School of Economics and stock exchange qualifications from London and New York.

    Courses run by this instructor

Central London Hotel Venue, London, UK

All Euromoney Training courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.