Illustrative course outlines

At OTC we believe in tailoring our courses to meet each client’s specific requirements.  The illustrative course outline below gives an indication of the type of course content that we’ve been asked to deliver. For more information call us on +44 20 7700 3330 or email

Strategy & Leadership Finance & Commerce Investment Banking

Advanced Credit analysis

What is covered?

A practical workshop which builds participants’ corporate credit analysis skills.  We apply a structured framework of qualitative and quantitative analysis, covering risk analysis; market indicators such as bond and equity pricing; performance evaluation; cash-flow analysis; debt servicing capacity; risk and return and the implications of Basel 3

Participants complete a short credit rating exercise prior to the course - “rating” a corporate credit risk exposure. This case study forms the core of a review of the key components of a corporate credit risk analysis during the course..

Who will benefit?

To obtain maximum benefit participants should already have

  • A sound understanding of the key issues in corporate credit analysis;
  • Familiarity with the principal features of Excel
  • Familiarity with banking documentation and core banking and Capital Markets debt products


Course Content

The structure of a credit risk assessment and relative value
    • Components of credit risk assessment
    • What is included in a corporate credit risk rating?
    • Credit ratings and the use of rating migration matrices
    • Recovery rates vs default rates
    • CDS, bond spreads and share price movements
Qualitative risk assessment – External factors
    • Credit risk and economic cycles, political and regulatory issues
    • Understanding the structure, characteristics and ratios of the sector
    • Key drivers of sector profitability and cash-flows
    • Assessing critical success factors
    • Sector default rates
  • Analysis of past financial performance
    • Key measures of performance (growth rates, margins, coverage ratios)
    • Historical trends and benchmarking against peers
    • Defining, calculating and using operating cash flow
    • Cash vs. accrual accounting, operating leases, capitalized expenses, pension and tax expenses
    • Structure of cash flow statements
    • Consolidation principles and impact on cash flow analysis
    • Cash flow measures – uses and limitations
  • Typical ratios used in corporate credit analysis
    • Sector ratio specifics
    • Peer group analysis
Evaluating a company’s financial risk and strategy
    • Balancing business risk and financial risk
    • Treasury objectives: tenor matching, funding and liquidity needs
    • The effect of leverage on shareholder returns and the cost of capital.
    • Evaluating solvency and debt capacity
    • Liquidity issues
    • Overview of debt structuring issues
    • Forecasting business and risk profiles
Risk and Return
    • Principles of credit pricing
    • Implications of the credit crisis and Basle 3
Applying the skills developed during the training
    • Case study : Review background of an investment opportunity and make a summarized written application




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