In this pathway, Belinda Green explores the concept of credit risk and the different mitigation techniques that can be used. She explains the importance of effective deal structuring, internal monitoring plans, collateral and also the documentation suite typically used by lenders.
Watch all the videos and pass the test to obtain a certificate showing your completion of this Pathway. Certificates can be shared directly to your LinkedIn profile and social media accounts.
5 videos •
Credit risk is the risk of financial loss to a lender should a customer or counterparty default. The accurate measure of credit risk is an essential tool for credit decision making and internal risk management. In the first part of this video series, Belinda will discuss the concept of credit risk - what it is, how it is measure?
This video focuses on on documentary protections. Documentation is a crucial part of the credit risk mitigation process. Effective deal structuring minimises the severity of loss, and gives lenders a measure of control over the assets and cash flows of the borrower. It also provides lenders with early warning signs of potential credit risk migration.
Lenders can minimise LGD, and mitigate credit risk by taking collateral. This video explores all the different aspects of collateral such as the purpose of collateral, the different types of assets taken as collateral and the key points a lender must consider when taking collateral.
Documentation formalises the lending, borrowing and security arrangements between the parties, details the borrowers’ and issuers’ obligations and provides lenders and investors with the legal recourse in the event of default. This video explores some typical forms of documentation that parties enter into when issuing debt.