Credit Analysis: Corporate Issuers

LEVEL: INTERMEDIATE LEVEL

▪	Rate the credit quality of a corporate borrower/issuer
▪	Assess the industrial, commercial and financial performances of a corporate borrower in relation to competitors
▪	Estimate default probability in terms of spreads
▪	Assess market prices relative to default risks
▪	Make a synthetic recommendation to investors based on the quality/price ratio of a borrower/issuer’s risk

▪	Rating the risk quality of a corporate borrower Intermediate
▪	Analysing the industrial, commercial and financial performance of corporate borrowers - Intermediate
▪	Measuring the distance to default of an issuer/borrower - Intermediate
▪	Characteristics of various sectors (credit drivers) - Intermediate
▪	Risk ratios in terms of spreads - Intermediate

▪	Learn to rate corporate issues via a straightforward and concise but comprehensive method
▪	Points of reference and warning signals that bring to light the true credit drivers of a corporate issuer’s credit quality
▪	Analyse sectors to value an issuer’s credit quality and medium-term development within its sector
▪	Reconcile market analysis and market prices

▪	Asset managers (commercial paper, bonds and derivatives)
▪	Securities sales
▪	Originators
▪	Credit Analysts
▪	Traders of corporate commercial paper

Objectives

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Giving advice on loan and investment decision-making

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What is a stake for investors

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Role of rating agencies

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Relationship between markets and issuers

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Relationship between default probability and track record

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Credit quality rating

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Samples of rate companies

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Equity and bond financial analysis: differences, similarities, complementarities

Qualitative Internal Rating

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Analytical approach (sector, position within the sector, profitability, liquidity, debt repayment capacity)

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Understanding financial statements (P&L accounts, balance sheets, cashflow statements)

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Comparability over several periods

Problematic of accounting standards

Pro-forma accounts

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Analyst’s restatements (calculating key notions, EBITDA, EBIT, changes in WCR, cashflows, coverage of financial charges, free cashflow)

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Nature of the main ratios (profitability, debt levels, debt repayment capacity and liquidity)

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Importance and analysis of off-balance sheet commitments (declared and undeclared)

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Case studies
. Concepts are illustrated throughout the seminar, with case studies taken from various industrial and commercial sectors (e.g.: Telecoms, Automotive, Retail, Utilities)
. Final case study: how to draft a synthesis and make a recommendation