NEW COURSE

The EUROMONEY TRAINING CERTIFICATE in

4 day course

HONG KONG
WHO SHOULD ATTEND? Credit Managers and Analysts Accountants Corporate and Bank Consultants Treasury Managers Risk and Financial Analysts Corporate and Investment Bankers who want to learn how post 2012 credit is analysed and managed Research and Ratings Personnel Portfolio Managers Bank Regulators Management and Strategy Venture Capital Executives

Credit Risk: From Transaction to Portfolio Management

25-28 November 2013 Hong Kong
Course Director:

An internationally renowned educator, author, and banker

At the end of this course, you will:

Know how to price loans and allocate capital in todays world Apply state-of-the art cash flow techniques Refresh existing analytical skills and apply advanced analytical tools to better understand changes in economic, industry and company conditions Create an optimal portfolio mix Examine credit risk exposures under stressful conditions Chose and apply the most appropriate optimization modelling tools to loan portfolios Learn how to build and use interactive and local corporate and specialized lending risk rating systems Know the framework of Basel III Apply migration risk and learn how to use risk matrices to price and value loans, and govern the loan portfolio optimally Deal with workout situations and develop short term/long term turnaround strategies Develop valuations utilizing state-of-the-art valuation software to determine and evaluate value gaps, probability of default, and correlation matrices 24 Points

Due to recent changes in VISA processing, delegates are strongly advised to obtain relevant VISAs up to one month prior to the course.

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COURSE CODE

www.euromoneytraining.com/asia

EHTH5413 - W

Credit Risk: From Transactio

Biography
The Course Director is an internationally renowned educator, author, and banker. He serves as a financial consultant, educator, and adviser to a broad spectrum of professionals, including corporate financial executives, government ministers, privatization managers, investment and commercial bankers, public accounting firms, members of merger and acquisition teams, strategic planning executives, management consultants, attorneys, and representatives of foreign governments and international banks. He is a principal of two firms specializing in risk consulting, training, certification, and advanced analytical software in the areas of risk quantification, analysis, and management solutions. Prior to this, Professor Glantz built a progressive career path at JP Morgan Chase specializing in credit analysis and credit risk management, risk grading systems, valuation models, and training. He was instrumental in the reorganization and development of the credit analysis module of the Banks Management Training ProgramFinance, which at the time was recognized as one of the foremost training programs in the banking industry.

Agenda
COURSE OVERVIEW This comprehensive 4-day course is designed for bankers, credit and product specialists and other professionals responsible for maintaining top quality loan portfolios, identifying risk management opportunities and designing financial solutions for clients in the current international credit environment. There is widespread agreement, particularly amongst regulators that financial institutions need to rethink credit policies, procedures, and the risks they are taking. This course explores risk from the perspective of a new credit setting and shows how to make wise credit decisions and optimally manage lending portfolios. We make use of the newest credit management tools that will become bank standard through the world including advanced cash flow and projection analysis, industry specific internal risk rating systems, knowing clients, portfolio management and loan valuation. The bottom line is that lenders who learn how to take prudent risks and protect their financial institutions will advance careers and win business. METHODOLOGY This course is intensive, interactive and encourages participation. Hands-on exercises, deal analysis, examples and case studies reinforce concepts and help deliver solutions. Participants will use laptops during the workshop.

Day 1
Assessing business risk and financial risk of a corporation
Key

Corporate strategy and SWOT analysis

Porters SWOT

generic strategies analysis

risk factors Prism credit model Structure, price, monitor & manage loans
The

Cash flow and multivariate ratio analytical workshop

Merging

Case study: International Drug Corporation Delegates determine appropriate (stochastic) distributions, the forecast variable, run simulations, select (frequency chart) confidence levels, call up reports and evaluate project managers proposal to the bank Harvard case study: Savannah West Delegates work in teams to evaluate risk under uncertainty arrives at a decision and firm loan structure

Case study: Delegates determine the timing for disbursing funds and establish a repayment arrangement
Business

operations and bank relationship Loan purpose and repayment Protecting the loan: A matrix system Importance of covenants Monitor and manage loans and build upon client relationship Case study: Analysis of a weak credit Crochet Candy Corporation

multivariate ratio analysis and cash flow What are sources and uses of cash? Developing a bankers cash flow statement How to spot funny money Check lists to insure reliability Projects and joint ventures Merging cash flow and ratio analysis How does cash flow know-how help bankers build up value drivers Case studies: Oscar Products: Analysis of ratios and introduction to cash flow Gem Furniture: Reconstruction of cash flow and analysis Farmers Connection: Forensic cash flow structure and deal analysis

Analyzing the obligors business, industry and risk profile

Analysing Industry

Review of Moodys KMV Concept: Distance-To-Default

Expected

sector specific drivers loan portfolio methodology Company operations, key competitors, the impact of economic factors, the pattern of industry growth and earnings Identifying and quantifying risk factors in Asian industries Case study: Printing Industry How to develop a industry analysis

and unexpected default effect model of default Differences between default and risk and how to calculate each Relationship of asset values, asset volatility and debt levels Moodys default point Deriving distance-to-default
Cause-and

Day 2
Standard vs. Modern forecasting
Adjusting

Day 3
Introduction to Basel III
Basel

Know both client and business

Keys

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to make the relationship work of conflicting demands Understanding the management role Internal scrutiny at the business level Assessment of the business strengths and weakness against competitors Competitive landscape The appraisal report and shareholder valuation Industry risks and current market conditions Industry specific questions to ask
Reconciliation

critical assumptions and value drivers Overview financial projections Statistical tools Sensitivity analysis vs. Simulations How to write up and/or present effective projection analysis Understanding an obligors financial needs Sensitivity analysis vs. Stochastic (simulations) projections Determining default frequencies Exercise: Piece of Cake Company Using simulation software to compare deterministic and stochastic projections

III implementation in context with credit/portfolio analytics Basel II vs. Basel III Tier 1 (core) capital ratio Other capital ratios Purpose of capital conservation buffer Supplemental capital The countercyclical buffer range Regulatory capital ratio Differences between total capital requirements and tier 1 requirement Dealing with excessive credit growth and acceleration of the build-up of the conservation buffer

COURSE CODE

EHTH5413 - W

Register your place today!

www.euromoneytraining.com/asia

on to Portfolio Management
He is on the adjunct finance faculty at the Fordham Graduate School of Business. He has appeared in Harvard University International Directory of Business and Management Scholars and Research and earned Fordham University Deans Award for Faculty Excellence on three occasions. He is a Board Member of the International Standards Board, International Institute of Professional Education and Research (IIPER). He received an MBA Finance from New York University; B.B.A., magna cum laude Baruch College, City University of New York. Professor Glantz has authored eight books published by world-class publishers. His eighth book Multi-Asset Risk Modelling, published by Elsevier, will be available third quarter 2013.

SAVE TIME AND MONEY WITH IN-HOUSE TRAINING

In-house training is an efficient and cost effective way to ensure that your employees are equipped with the knowledge and skills needed to make a real impact in your organisation. Training can be arranged for anything from small groups to entire divisions and will take place at a time chosen by and convenient to you. For more information on holding this, or any other Euromoney Training course in-house, please contact: Sharon Hu, Division Manager, Finance Tel: +852 2520 1481 Email: inhouse@euromoneyasia.com

Class discussion: Basel III pros and cons

Credit

Default correlations and loan portfolio management

Deriving The

default correlations equity driven approach Other approaches (spread correlation) Recent findings on correlation Default correlations and targeting the Efficient Frontier Case study: Rating agency analysis of portfolio credit linked note Computer workshop: Portfolio optimisation under conditions of uncertainty asset (loan) allocation model with correlations

VaR and risk-adjusted performance measurement Loan servicing and activity costs Fee-in-lieu-of-balances calculation Determining probabilities loan pricing falls below RAROC mandated by the bank/profit center

Valuing

a multibusiness capital costs and capital structure of a multibusiness Performing business unit valuations Spin offs, sell offs, equity carve outs and LBOs
Determining

Management Exception

Day 4
Valuing the obligors business
Performing

Case study: AFCE Enterprises Computer analysis and valuation of strategic divestitures of major company brands

reporting reports Credit administration reports Communication with senior management Indirect exposures Corporate risk management Divisional exposure management Regulatory/External reporting GES source of important data

Portfolio and resource optimisation

Identify

a liquidation valuation a corporate appraisal Book value method Liquidation vs. Cash flow value Last transaction approach Valuation multiples approach Cash flow valuation Advantages vs. Disadvantages Stochastic valuation Assessing success probabilities
Developing

How to develop interactive industry specific credit rating grids for borrowers/facilities
The

Loan policy and procedures of an international bank

The

a borrowers optimal maximum/minimum values How to handle nonlinear relationships Portfolio optimisation and efficient allocation of resources and projects, along with efficient frontiers Chose and apply the most appropriate optimisation method to loan portfolios Rolled-up projects Creating an optimal portfolio mix Case study: RI Furniture Corporation Using stochastic optimisation and valuation models to evaluate the credit risk of corporate restructuring

Financial distress models and a new approach to problems in the loan portfolio
Workouts

risk grading process rating and loan portfolio optimisation Ratings grids and loss given default Standards and guidelines Borrower and transaction risks Evaluating and setting up obligor financial measure weights Evaluation collateral and guarantees Transfer and portfolio risk Specialized lending advanced risk rating systems
Risk

role of credit administration policy committee Setting up statements of loan policy CAMELS bank rating system
Credit

Related courses:
Financial Restructuring and Corporate Turnaround 11-13 September 2013, Hong Kong Loan Syndication Structuring, Selling Down & Documentation 25-27 September 2013, Singapore Loan Pricing and Structuring Masterclass (modular course) 28 Oct-1 Nov 2013, Hong Kong Credit Analysis and Financial Modelling 11-15 November 2013, Hong Kong Advanced Credit Analysis and Financial Modelling, 18-21 November 2013, Hong Kong

at local banks

Class discussion: Regulatory issues managing problem loans Checklist of storm signals
Financial Auditing

Fundamentals of loan pricing

Determining Determining

distress models techniques How to stop the bleeding Short term vs. Long term strategies Harvard case study: Westlake Lanes How to save this business?

Framework for developing stochastic computerized pricing models

Past,

Debt and corporate restructuring

Asset

loan loss reserve additional loan loss reserve when the loan is downgraded Loan pricing sensitivities Increased funding costs and loan loss expense Equity reserve requirement Spreads over base rate Fee-in-lieu-of-balances calculation Loan servicing and activity costs Using potential loss to allocate capital Determining capital for potential losses Evaluating computerized pricing model

Venue
All of our courses are held in 4 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course. Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course.

present and future computerized risk rating systems into the pricing matrix How the facilitys expected loss frequency affects the pricing
Incorporating

swaps resolution of value gaps Equity swaps Modification of debt terms Developing McKinsey restructuring pentagon Closing value and perception gaps
Stochastic

Global exposure systems and loan management

GES

as a major step toward Basel III compliance Portfolio exposure management Set up reporting function within GES

Email

training@euromoneyasia.com

+852 2520 1481

Telephone

Facsimile

+852 2866 7340

Funding support

4 easy ways to register

1.  Web www.euromoneytraining.com/ asia 2.  Email training@euromoneyasia.com 3.  Telephone +852 2520 1481 4.  Facsimile +852 2866 7340

The Monetary Authority of Singapore (MAS) administers grants to financial sector organisations that sponsor eligible participants to training programmes that meet qualifying criteria. For enquiries, please contact the MAS at (65) 6229-9396 or via email at fsdf@mas.gov.sg. Euromoney Training Certificate Delegates who successfully complete this course will receive the prestigious Euromoney Training Certificate - a statement of excellence recognised worldwide.

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Group booking discounts**

2 delegates - 5% discount 4 delegates - 12% discount 3 delegates - 10% discount 5 delegates - 15% discount

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EHTH5413 - W

Please ensure you enter your event code when registering and you will be entered into our quarterly prize draw to win 50 of Visa vouchers.

**Available for delegates booking together from one organisation attending the same course.

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Credit Risk: From Transaction to Portfolio Management on 25-28 November 2013, Hong Kong (EHTH5413)
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