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Corporate Credit Analysis and Debt Structuring

Learn the fundamentals of corporate credit analysis and how to assess a firm's implied credit rating, its debt servicing capacity and structural transaction risks

Corporate Credit Analysis and Debt Structuring Course

A three-day course

This corporate credit analysis course provides essential skills and learning points for:

  • Bank credit officers 
  • Investment bankers, particularly those specialising in distressed debt reorganisations 
  • Debt capital markets specialists 
  • Bond credit analysts 
  • Fixed income credit traders 
  • Fixed income credit sales people 
  • Fixed income fund managers  
  • Treasurers and financial decision makers in corporations 
  • Compliance officers 
  • Management consultants 

  • It combines financial theory with practical examples that should be relevant to delegates' daily work experience
  • It uses up-to-date case studies of firms that are changing their capital structures and choice of funding methods and reviews different types of credit analysis
  • It gives a broad overview of different funding sources that may be used to restructure a client’s capital base, depending on the group’s credit profile and financing requirements
  • Delegates will be given a comprehensive forecasting model that incorporates sensitivity analyses around the capital structure and cash flow generation, to help calculate returns and key credit ratios under different scenarios
  • We reference and analyse a wide range of corporates including Vodafone, Aston Martin, Virgin Media, Altice, Eircom and PORR

Delegates should choose this 3-day corporate credit analysis course because:

  • It will teach delegates how to assess a firm's implied credit rating, its debt servicing capacity and structural transaction risks. The course and covers credit analysis of both bond and loan exposures.
  • It gives delegates an overview of the fundamentals of corporate credit analysis to improve their understanding of how to assess a firm’s funding requirements and whether the firm can service its forecast indebtedness;
  • It will help delegates understand the potential impact of new funding structures on the firm’s WACC, actual or implied credit ratings and earnings per share;
  • It will help delegates understand different types of debt and hybrid funding instruments, including loans, bonds, private placements, unitranche funding, convertible bonds, exchangeable bonds, preferred and mezzanine debt;
  • It will enhance the delegates’ ability to use financial forecasting models to make credible financing recommendations to clients and to structure transactions.
  • It gives delegates an overview of LBO transactions and of covenants for leveraged transactions

Day One

Analysis of the client’s income statement

  • Are operating earnings sustainable, cyclical, volatile, predictable?
  • What are the main drivers and sensitivities of operating earnings?
  • The importance of defining EBITDA and underlying/adjusted EBITDA
  • Adjusting for exceptional and non-core items – restructuring, provisions, impairments, discontinued items, FV of financial assets and liabilities, disposal gains/losses and business combinations (IFRS 3)
  • Adjusting for off balance sheet leases
  • Adjusting for accretion expense, capitalised interest, capitalised costs
  • Calculating finance income and expense, including derivatives and hybrids
  • Adjusting for joint ventures and NCI
  • Ratio analysis: margins (gross, EBITDA, EBIT, pre-tax, net), interest cover, basic and enhanced dividend cover, ROE, ROIC

Analysis of the client’s cash flow statement

  • What are the main sources and uses of cashflow?
  • Are the sources of cashflow sustainable?
  • Does operating profit turn into operating cashflow?
  • The impact of NWC on cashflow
  • Can the firm fund its investment spending and dividends from net operating cash flow?
  • Adjusting capital spending for leased assets
  • Can the firm fund debt amortisation from net operating cash flow?
  • Are there any other sources of cash flow?
  • Ratio analysis: Interest and investment coverage; debt service and debt repayment coverage (DSCR), cash conversion ratios, dependence on external financing, cashflow based ROIC, dividend coverage

Analysis of the client’s current financial structure

  • The nature of the asset base:
    • PP&E, intangibles, joint ventures and investments current assets,
    • Financial assets - cash, investments, derivative assets, cash pledges, restricted cash, deferred revenues
    • Deferred tax assets
  • How are the assets valued? What is the outlook for impairments or revaluations?
  • The security value of assets
  • Current assets, including excess and restricted cast
  • Accounting for receivables funding, recourse, non-recourse and partially recourse
  • Current liabilities, including payables, tax, accruals and supply chain finance and short-term debt
  • Calculating gross and net debt, including off-balance sheet exposures and hybrids
  • Assessing quasi debt including retirement benefit liabilities and derivatives
  • Assessing seasonal working capital requirements
  • Assessing actual liquidity and potential liquidity sources
  • Assessing the impact of other liabilities: deferred tax, provisions, trade payables
  • Assessing the asset base as a source of liquidity and security
  • Analysis of key ratios and their limitations – net debt/EBIT(D)A, net debt/equity, NWC ratios, liquidity ratios, ROIC, ROE, asset turnover, Dupont analysis, asset coverage, debt maturity profile

Day Two

Qualitative factors

  • Sovereign factors
  • Industry factors
  • Industry scorecard

Considerations for debt structuring

  • Size
  • The firm’s financial objectives
    • Debt maturity profile; current or target credit rating; non-recourse funding; targeting the WACC
  • Funding requirements
  • Covenants and regulatory constraints
  • What is the firm’s debt capacity?
    • Capacity for amortising debt
    • Managing cyclicality
    • Modelling debt capacity in a financial forecasting model with scenarios

Defining an optimal capital structure

  • Does the firm have an optimal capital structure?
    • Defining enterprise value and equity value
    • Overview of WACC
  • How will the new financing change the firm’s capital structure, credit ratings, WACC, EPS and valuation?

Borrowing structures

  • How different shareholder/control situations impact the consolidated accounts
  • Structural subordination
  • Ring-fencing between strong and weak subsidiaries
  • Dealing with inter-company loans
  • Guarantees
  • Double leverage
  • Bankruptcy remote vehicles/bankruptcy remote SPVs

Day Three:

Overview of debt products – short term public and private issuance

  • Overdrafts
  • Revolving credit facilities
  • Commercial paper and swing lines
  • Working capital facilities
  • Receivables funding
  • Acceptances
  • Supplier finance

Overview of debt products – long term non-capital markets

  • Bi-lateral term loans & leases
  • Syndicated term loans – investment grade
  • Syndicated leveraged loans
  • Mezzanine finance
  • Private placements
  • Uni-tranche funding

Overview of debt products – long term public debt issuance

  • Investment-grade bonds
  • High yield bonds
  • Green bonds
  • Commodity-linked bonds
  • Bridge bonds

Overview of hybrid securities

  • Convertible and exchangeable bonds
  • Mandatorily convertible bonds
  • Equity neutral convertible bonds
  • Subordinated long term bonds
  • Assigning equity credit to hybrid securities

Basic terms of the facilities

  • Controlling use of proceeds
  • Maturities
    • Amortisation and final maturities
    • Mandatory and voluntary prepayments
    • Clean down clause
    • Evergreen
  • Committed versus uncommitted facilities
  • Accordion features
  • Pricing for the different facilities
    • The pricing basis (e.g. 3m LIBOR)
    • Up-front fees and margins
    • Coupon step-ups, PIK options, PIK toggle, PIYC
    • Default pricing
  • Structuring the debt to include flexibility for different cashflow outcomes
  • Cashflow sweeps
  • Payment waterfalls
  • Hedging arrangements
  • Cancellation of facilities

Overview of LBOs

  • Rationale to LBOs
  • Recent trends in LBOs
  • What sort of firms are suitable for an LBO?
  • Structuring an LBO
  • Sources and uses of funds
  • Typical leveraged structures
  • Layering the capital structure
  • Typical debt and quasi-debt funding instruments
  • Calculating entry multiples and key credit analysis ratios
  • Creating value from LBOs
  • Considerations for exiting the LBO; dividend re-caps
  • Assessing returns to equity and subordinated lenders


  • What is covenant loose?
  • What is covenant-lite?
  • Recent trends in covenants in the bond and syndicated loan markets
  • Financial and non-financial
  • The construction clause - definitions
  • The compliance certificate
  • Value maintenance covenants
  • Leverage and limits of indebtedness
  • Interest cover
  • Limitations on dividends
  • Limitations on investment spending
  • Limitations on M&A and disposals
  • Negative pledge
  • Limitations on sale and leasebacks
  • Limitations on demergers
  • Change of ownership or control
  • Grace periods
  • Freebie baskets
  • Mulligan clauses
  • Carve-outs
  • Equity cures

For the last fifteen years, the corporate credit analysis course trainer has worked as a financial trainer and consultant with major training firms, covering basic and advanced corporate credit analysis and valuation, distressed debt, financial analysis and financial modelling. Recent assignments have included the European Central Bank, the European Investment Bank, the European Bank for Reconstruction and Development (EBRD), DBS in Singapore, Siemens, Deloittes, HSBC, Carnegie Bank, Gibbs Business School in Johannesburg, Bahrain Institute of Business Finance, Bank of China, BBVA, the African Development Bank, Rand Merchant Bank, Hamburg Central Bank and Mizuho Bank. Delegates have ranged from graduate trainees to board members.

A former Executive Director of CSFB and Lehman Brothers, the trainer spent seventeen years working as an investment banker in Europe and the US.  After graduating from the London School of Economics with a degree in Economics, she joined Kleinwort Benson Ltd as a graduate trainee. She worked initially on analysing, structuring and investing in US LBOs and MBOs and also US high yield debt. Thereafter she worked in Kleinwort Benson’s European corporate finance department, gaining experience of IPOs, mergers, acquisitions, disposals and corporate restructurings, with particular focus on receivership and bankruptcy situations.  She then moved to CSFB’s fixed income department as the lead European corporate credit analyst, covering new issues and secondary trading and advising clients on their fixed income portfolios. She was then head-hunted to go to Lehman Brothers as lead corporate credit analyst. She specialised in high-grade and cross-over telecoms, including new issuance and advising proprietary traders and fund management clients on their investments. She has also worked as an expert witness on financial trials and as an advisor on private equity transactions.

This corporate credit analysis course is intended for a range of financial professionals including investment bankers, private equity investors, commercial bankers and other types of lenders. The course focuses on using credit analysis in investment and commercial banking transactions and will teach delegates how to develop financing solutions for corporate clients or invest in corporate debt instruments. The course covers the background of the corporate credit analysis process to enable delegates to assess the firm’s current financial position, debt servicing capacity and implied credit rating. We then look at assessing the firm’s financing needs and the likely impact of new financing structures on key metrics such as its credit rating (actual or implied), its WACC and its EPS. To address a firm’s financing needs, we consider a wide range of debt and quasi-debt products such as overdrafts, RCFs, tailored NWC facilities, senior and subordinated bonds and loans, leases (IFRS 16), private placements, off-balance sheet funding and hybrid debt (convertible bonds (CBs), mandatory CBs, exchangeable debt, equity-neutral CBs, preferred shares). We also highlight factors such as relative costs, covenants and security, special features (e.g. coupon step-ups, reserve accounts, commodity-linked coupons and principal, embedded sovereign insurance) and the need for diversification of the funding/investor base.


Have this course presented In-House

  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements

Have this course pre-recorded

  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS

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