Introduction to capital markets and credit risk analysis introductory

Credit analysis and its role in company decisions is increasingly important in an M&A environment increasingly dominated by leveraged buyouts. The session starts with an overview of the different ways in which companies raise money. Participants then look at credit risk analysis by analyzing the impact of debt on a company and assessing a company''s debt capacity. This includes a detailed analysis of cash flow and different means of measuring cash flow. Using a company''s business strategy, participants build a model to analyze the key risk measurement ratios for interest coverage and financial leverage. The analysis highlights the trade-off for a company between debt financing and the creditors'' risk appetite.

• An overview of capital market products
• Equity
• Debt
• Hybrids


• Detailed overview of debt as a form of financing, the impact on company''s business and financials
• Forecasting a company from a debt perspective
• Definitions of cash
• Looking at the ability to service debt
• Interest coverage
• Leverage ratios
• Cash flow ratios


• Looking behind the credit ratios
• Debt capacity
• The company''s point of view
• The creditor''s point of view
• Cost of debt


• Risk measurement via rating scores
• The role of external rating agencies (Moody''s, S&P, Fitch)