Credit Basics

Essentials of Credit Risk Analysis

Managing Credit Risk

Credit Rating and Probability of Default

Credit Risks in Project Finance

Road to Credit Crisis

Module 1: Credit Basics (Foundational)

What is credit? (Definition, purpose, types of credit)

Key parties involved in a credit transaction (borrower, lender, guarantor)

The "Five Cs" of Credit (Character, Capacity, Capital, Collateral, Conditions) - In-depth analysis and practical application.

Understanding credit scores and credit reports (for individuals and businesses)

Interest rates, principal, and repayment structures

The concept of leverage and its implications.

Module 2: Essentials of Credit Risk Analysis

Defining credit risk and its various forms (default risk, concentration risk, counterparty risk, etc.)

Qualitative analysis of credit risk (management quality, industry analysis, business model, competitive landscape)

Quantitative analysis of credit risk (financial statement analysis, key financial ratios – liquidity, solvency, profitability, efficiency)

Cash flow analysis and forecasting

Introduction to credit spreads and their significance.

Module 3: Credit Rating and Probability of Default

The role of credit rating agencies (Moody's, S&P, Fitch)

Understanding credit rating scales and their implications

Methodologies for assigning credit ratings (corporate, sovereign, structured finance)

Defining Probability of Default (PD) and Loss Given Default (LGD)

Expected Loss calculation and its importance

Introduction to credit migration and transition matrices.

Module 4: Managing Credit Risk

Credit policies and procedures (origination, underwriting, monitoring)

Risk appetite and limits setting

Credit portfolio management (diversification, concentration limits)

Collateral management and legal enforceability

Covenants and their role in risk mitigation

Credit risk transfer mechanisms (credit derivatives, securitization – introductory)

Early warning indicators and troubled debt restructuring.

Module 5: Credit Risks in Project Finance

Introduction to project finance structures (SPVs, non-recourse/limited recourse)

Unique credit risks in project finance (construction risk, operating risk, off-take risk, political risk, environmental risk)

Debt structuring in project finance (debt sizing, repayment profiles, security packages)

Role of independent engineers and technical advisors.

Module 6: Road to Credit Crisis

Historical overview of major credit crises (e.g., Subprime Mortgage Crisis, Asian Financial Crisis)

Identifying common drivers of credit crises (asset bubbles, lax lending standards, regulatory failures, excessive leverage, contagion)

The role of systemic risk and interconnectedness in financial markets

Lessons learned from past crises and implications for current risk management practices

Macroprudential policies and their role in preventing future crises.