Credit and Loan Markets
Course description
The
course provides a comprehensive overview of the credit and loan
markets. On the loan origination side, the mechanics of syndications and
loan trading are explained in detail, while on the buy side the focus
is on asset securitisation techniques and credit derivatives.
Beyond
the description of the various lending and asset repackaging
techniques, and the role of the various market participants, the course
analyses the factors that explain the rapid expansion of these markets,
and the reasons for the mid 2007 crisis. Particular attention is paid to
capital requirements, returns, credit portfolio management and the
implications of the new Basel II Accord.
Day 1
Overview
Developments over the past twenty years:
Recapitalisation, diversification and consolidation of the banking sector
Disintermediation-bond market and asset securitisation.
Impact on lending.
Current status and future outlook:
Lending as a core banking activity?
Financial fundamentals of lending: pricing credit risk
Credit risk, capital adequacy requirements (CAR) and provisions.
Economic and Regulatory capital
Internal and external ratings
RORAC/RAROC pricing.
Rating agencies
Role.
Approaches to rating.
The meaning and limitations of ratings.
Basel II
Mechanics
Impact on pricing for:
Different business lines: retail vs. corporates
Transactions of different credit quality
Collateralised or guaranteed transactions
Asset securitisation
Drivers of the loan markets
Banks:
Improving RORAC
Active credit portfolio management:
Concept and objectives
Tools: loan sales, securitisation and credit derivatives.
Investors
Why invest in loans?
Asset Sales
Overview and Trends
Syndications and Asset Securitisations
Loan trading
Syndications
Concept
Rationale for investors and borrowers
Market players
Mechanics of syndications
Structure
Process
Pricing
Covenants
Secondary Markets
Types of facilities
Day 2
Loan trading markets
Size and Participants
Technical developments, tradability of loans and Pricing
Performing and Distressed loans trading
Asset Securitisation
Traditional Securitisations
Synthetic securitisations
ABS structures
CDOs, CLOs
Recent Market Difficulties
Leveraged Loans
Rating agencies definitions
Market Size, Participants and Trends
Mezzanine Debt and Junk Bonds.
Credit Derivatives
Credit Derivatives as Hedging Instruments
Mechanics
Uses
Credit derivatives trading and markets
Jean-Charles Pirlet
Jean-Charles
is the founder and managing director of Analytiques and is personally
involved in the on-site delivery of training courses and consulting
services.
Jean-Charles spent seven years in the Credit, Corporate
and Investment Banking divisions of Citibank, including three years in
the World Corporation Group in London as Vice-President managing a
portfolio of UK multinationals on a worldwide basis.
He
subsequently worked as Director of Project Finance and Acquisition
Financing for Security Pacific in Frankfurt before returning to South
Africa in 1993 as Head of Corporate Banking (Senior Vice-President) for
the local operation of ABN-Amro.
Jean-Charles has broad credit
experience gained over 20 years as credit analyst, credit officer and
credit committee member at Citibank and ABN-Amro, covering Corporate
Banking, Financial Institutions, Structured finance, Leveraged
transactions, Asset securitisation and Derivatives.
He provides
in house training to international financial institutions such as
Merrill Lynch, Royal Bank of Scotland, Nordea, Barclays, CIBC and West
LB and runs public courses in the UK, Honk Kong, South Africa, Singapore
and the Middle East.
He also assists banks with the hands on
implementation of the Basel II Accord in a consulting capacity and is
Programme Director Basel II specialist at Bank T&D Consulting Ltd (
www.banktandd.com ), a London based consulting firm.
He holds an LLB and an LLM in Tax Law from the University of Liθge in Belgium.
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