Loan and Transaction Structuring Masterclass
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Loan and Transaction Structuring Masterclass Course
Introduction:
Loan structuring is simply designing the loan to fulfill the financing requirements of the borrower while simultaneously attempting to protect the lender against loss resulting from the failure of the borrower to repay the debt and the interest and fees thereon.
Loan structuring involves several elements, including purpose, amount, collateral and type of loan, risk recognition and mitigation, pricing, and financial covenants. All of these elements must work for both the borrower and the lender within the two definitions above.
Loan & Transaction Structuring Masterclass Training Course aimed at mid-level corporate bankers, analysts, product and client servicing and support teams wanting to gain an understanding of how credit assessment, loan structuring, cash flow analysis and loan covenants can be used effectively to ensure corporate client borrowing needs are matched and serviced by the appropriate bank loan facility.
Participants are not expected to be lending experts but a basic understanding of bank lending products and some lending exposures would be helpful.
Course Objectives:
By the end of this Loan & Transaction Structuring Masterclass training course, participants will be able to:
- identify the key elements of credit risk
- Understand the working capital cycle of a business
- Measure, quantify and evaluate the actual borrowing needs of the client (lend them what they need as opposed to what they want or think they need).
- Assess the risk of lending the client what they actually need
- Understand the difference between short, medium and long term loans and the risk profiles
- Analyze the cash flows – the source of our repayment over the length of the loan
- Select the most appropriate lending structure
- Decide whether security is required
- Select appropriate documentation and loan covenants to manage the loan
- Learn how ongoing management of the loan is vital
- Be clear that the practice of “following the bank’s money” must always be implemented
Who Should Attend?
Loan & Transaction Structuring Masterclass Training Course, is ideal for:
- Financial decision makers in corporations
- Bank credit officers
- Compliance officers
- Investment bankers
- Management consultants
- Bond credit analysts
- Fund managers
- Treasurers
Course Outlines:
Introduction To Credit Risk
- What is credit risk?
- The different types of credit risk
- Sovereign
- Corporate
- Retail
- Systemic
- Counterparty
- The current lending environment
- Risk appetite statements and their impact on lending strategy
- How do we assess, measure, manage and mitigate credit risk
- The three methods of calculating credit risk, are standardized, foundation, and advanced IRB
- The revised standardized approach
- The impact of IFRS 9
Lending Refresher – overview
- Definitions & basic lending principles
- Lending policies, lending strategies, lending systems
- Data/information collection
- Approvals, security, drawdowns
- Management & monitoring systems
The Credit Risk of Specific Financial products
- Loans and overdrafts
- Term loans
- Project Finance
- Construction Finance
- Private-public partnerships
- Government and corporate bonds
- Equity and mezzanine debt
- Credit derivatives
- Counterparty exposure
- Off-balance sheet commitments
- Trade finance
- Mortgages
- Credit cards
The Working Capital Cycle
- Definition
- Understanding the mechanics
- Seasonal or non-recurring cycles
- The role of bank finance
- The role of the overdraft
- Understanding break-even analysis
- Understanding banker's cash flows
- How to lend support to the cycle
- When an overdraft becomes a medium-term loan
- Managing multiple cycles
The Basic Principles of Lending
- Appraisal techniques
- Credit assessment
- Business clients
- Corporate Clients
- Private Wealth Clients
- Trade Finance
- Group credit appraisal
- Development Finance
- Project Finance
