BY THE END OF THIS COURSE, YOU WILL BE ABLE TO:
» Recognize how credits behave through an economic/sector cycle.
» Recognize deterioration of credit quality early enough for efficient response.
» Identify creative accounting and understand a company’s true financial performance.
» Assess a company’s liquidity position and the factors that may cause it to deteriorate.
» Understand the role of covenants and collateral and their ability to improve recovery rates for lenders.
» Create an effective plan of action to address troubled situations and maximize recovery.
» Bankers.
» Bondholders.
» Underwriters.
» Private placement investors.
» Credit analysts.
» Bond researchers (both buy and sell sides).
» Corporate treasurers.
» Correspondent banking officers.
» Relationship managers.
» Financial distress and the credit cycle:
- The costs of problem credits.
- Stages of the credit cycle.
- The cash crisis timeline.
» Early warning signs (‘EWS’) of financial distress:
- Leading versus lagging indicators.
- What is an LBO and why might one get into trouble?
- Business and operational EWS.
- Management EWS.
- Market EWS.
- Accounting EWS.
- Complex corporate structures.
» Cash flow and liquidity:
- Cyclicality and credit.
- Analyzing cash flow.
- The importance of liquidity.
- Moody’s approach to analyzing liquidity.
» Covenants, collater al and structure:
- Drivers of covenant strength.
- Covenant-lite and covenant-loose.
- The convergence of bond and bank covenants.
- Analyzing covenant weaknesses.
- Restricted groups and the credit implications.
- An action plan for covenant breaches.
- Collateral strengths and weaknesses.
- Valuing collateral and why it could go wrong.
- An overview of structure risk.
- Analyzing guarantees.
» Restructuring :
- Identifying the cause of the problem.
- Phases of a restructuring.
- The basic rules of restructurings and why it does not always work out as planned.
- Building a restructuring plan.
- Identifying the key stakeholders.
- Short-term actions.
- The long-term plan.
- What can go wrong in the restructuring process.