CORPORATE CREDIT ASSESSMENT

(INTRODUCTION)

 

Objectives

This training programme is designed to give delegates a thorough understanding of the basic principles of lending to businesses, ranging from SMEs to large quoted corporates. This is a foundation course, aimed at staff new to credit analysis or credit/account management. Delegates should have a basic understanding of financial statements before undertaking this course (if not, we recommend attendance on Understanding Company Accounts first).

Content

  • the principles of lending

·  cash flow analysis

·  types of business (sole trader/partnerships/ limited companies)

·  structuring facilities

·  putting analysis into context - the "Risk Funnel"

·  security

·  non-financial assessment tools

·  warning signs

·  understanding the accounts

·  practical exercises and case studies

·  ratio analysis

·  suggested post course activities.

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CORPORATE CREDIT ASSESSMENT (ADVANCED)

 

Objectives

This training programme is designed to give delegates a thorough understanding of the principles of lending to businesses, ranging from SMEs to large quoted corporates. As our advanced course, this programme is designed to enhance existing skills and to develop more effective ways of analysing corporate credit risk. It is particularly aimed at existing credit analysts, credit managers and account/relationship managers.

Content

  • principles of lending revisited

·  lending to groups of companies

·  putting analysis into context - the "Risk Funnel"

·  structuring facilities, including the effective use of covenants

·  non-financial assessment - understanding the business

·  credit ratings and other market views of risk

·  creative accounting issues and contingent liabilities

·  corporate warning signs and how to avoid past mistakes

·  advanced ratio analysis

·  practical exercises and case studies

·  cash flow analysis and projections

·  suggested post course activities.

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UNDERSTANDING COMPANY ACCOUNTS

Objectives

This training programme is designed to give delegates confidence in reading and understanding company accounts, particularly plc annual reports and the accounting information available about private companies in the UK. It is an ideal foundation course for anyone involved in credit assessment, competitor analysis and credit control. It tackles the subject in a highly practical way, demystifying the jargon and avoiding unnecessarily complex explanations of accounting standards.

Content

  • types of accounts

·  the balance sheet explained

·  sources of information

·  off balance sheet assets & liabilities

·  basic accounting principles and concepts

·  cash flow statements

·  directors' responsibilities and the audit statement

·  key financial ratios

·  groups of companies and consolidated accounts

·  international accounting issues

·  the profit & loss account explained

·  suggested post course activities.

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CASH FLOW ANALYSIS

 

Objectives

This training programme is designed to give delegates a thorough understanding of the principles of cash flow analysis and how cash flow analysis and projections can lead to more informed credit decisions. It is particularly suitable for more experienced lending managers whose formal training was concluded before cash flow statements (per FRS1) were introduced.

Content

  • the importance of cash flow analysis; links with "traditional" ratio analysis

·  cash flow ratios, contrasted with their conventional equivalents

·  how and why cash flow differs from reported profits

·  projecting cash flows and spotting potential liquidity crises

·  the UK accounting standard 'FRS1' - layout and limitations

·  case studies, eg Wickes, to demonstrate that "cash does not lie"

·  interpreting and analysing the cash flow statement - key performance measures

·  suggested post course activities.

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IDENTIFYING PROBLEM LENDING

Objectives

This training programme is designed to give delegates a practical grounding in the ways to spot emerging problems, both with individual accounts and on a portfolio basis*. Practical exercises will be used to show how predictive ratios and cash flow analysis can help to highlight accounts at risk, in conjunction with a study of key non-financial indicators. This course makes an ideal precursor for our Managing Problem Lending programme

Content

  • what makes lending problematical?

·  using management information to spot problems

·  setting the scene for analysis - the "Risk Funnel"

·  cash flow analysis and predictive ratios

·  economic cycles and indicators

·  account conduct

·  understanding the industry

·  the role of investigating accountants

·  understanding the borrower - products/processes/management

·  learning lessons from the past

·  peer group analysis

·  case studies and practical examples

·  financial warning signs - historic figures

·  suggested post course activities.

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MANAGING PROBLEM LENDING

Objectives

This training programme is designed to give delegates practical guidance in developing appropriate strategies for managing problem lending, for all types of business lending from SMEs to large multinational corporates. Practical exercises will demonstrate how to evaluate the options and how to protect a lender’s interests. The course will also consider the requirements of the BBA Code of Practice, multi-bank workouts, the issues involved in perfecting/realising security and the application of insolvency laws. This course makes an ideal companion to our Identifying Problem Lending programme

Content

  • recognising that a problem exists

·  implementing action plans/monitoring progress

·  immediate actions - capping your exposure

·  the BBA Code of Practice; multi-bank workouts and the "London Approach"

·  identifying the causes of the problems

·  insolvency law - some practical issues

·  gathering all relevant information

·  debt/equity conversions

·  the role of investigating accountants

·  learning lessons from the past

·  is there a viable business at all?; developing a recovery plan

·  case studies and practical examples

·  improving your security, renegotiating facilities/pricing

·  suggested post course activities.

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GROUP LENDING

 

Objectives

This training programme is designed to give delegates a thorough understanding of the principles of lending to groups of companies (or indeed to individual companies within a group). Delegates will be shown how to understand group structures, identify the companies with valuable assets and cash flows and then how to structure lending in the optimum way to maximise recoveries in the event of a default. This programme is particularly suitable for more experienced lending managers involving in structuring lending to plcs and large groups of privately owned companies.

Content

  • typical corporate structures

·  protecting your exposure - security structures

·  consolidated accounts v. "company alone" figures

·  protecting your exposure - covenants

·  sources of information

·  negotiating the optimum structure

·  identifying assets and cash flows

·  case study work/practical examples

·  insolvency of a "group"

·  suggested post course activities.

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PRACTICAL COVENANT SETTING

 

Objectives

This training programme is designed to give delegates a thorough understanding of the principles and practical issues involved in the specifying and monitoring of financial and non financial covenants. Lenders are frequently not able to take tangible security to protect their exposures, yet enter into term commitments. However, appropriately structured and documented covenants can provide an effective mechanism for lenders to take control and to manage their exposures - this highly practical training programme demonstrates how!

Content

  • what is a covenant?

·  Definitions do matter!

·  why are they needed?

·  Monitoring compliance

·  the principal financial covenants

·  case study 2 - negotiating the deal

·  the principal non financial covenants

·  dealing with breaches

·  choosing the right covenants

·  suggested post course activities.

·  case study 1 - which covenants to use?

 

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EFFECTIVE REPORT WRITING

 

Objectives

This training programme is designed to improve delegates’ ability to prepare concise, focused reports, specifically dealing with credit analysis reports and credit application proposal papers.

Content

  • what’s the problem?

·  Focus on the facts and issues

·  principles of report writing

·  ways to present complex data

·  understanding the needs of the reader

·  practical exercises

·  planning your work

·  suggested post course activities.

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