Mastering Corporate Banking and Financial Analysis

Group credit facilities by features and goals, covering revolving lines, amortizing lines, overdraft, bilateral and syndicated loans, and trade finance tools like factoring and pre-export financing.

Explore hybrid deposits that blend term and sight features, with pricing driven by tenure and amount under a EURIBOR framework, reflecting practical contract requirements and banking practice.

This lecture outlines the indicative memorandum as the first phase of proposing a loan deal, highlighting the client’s financial standing, net debt to EBITDA, EBITDA margin, and credit ratings.

Showcases a €30 million investment loan for X Industrial Holding Company to fund a new factory and expansion, highlighting diversified activities, a single bilateral agreement, and liquidity above 100%.

Assess the borrower's management and owner for credit approval, focusing on governance and compliance. Avoid politically exposed persons and embargoed or blacklisted country relations to prevent conflicts and compliance risk.

Learn how credit pricing works in the credit application phase, including base rate, reference rate, and margin, and how to transparently decompose pricing for clients using tools or Excel models.

Explore how to estimate loan profitability in a credit application, using internal reporting systems to compute direct income, margins, fees, and risk-adjusted return on capital under Basel requirements.

Analyze the cash flow statement's three sections: operating, investing, and financing, explaining how changes in accounts receivable, inventories, and accounts payable, along with depreciation, and investments, drive free cash flow.

The company demonstrates strong liquidity with large current assets and cash, a current ratio near ten and a cash ratio well above one, despite indebtedness and favorable credit committee review.

The lecture explains net debt to EBITDA and the debt service coverage ratio, showing how cash reduces net debt and influences lending decisions.

The final steps in loan approval include client and bank decisions, contract negotiations and signing, and disbursement with two-week drawdown notice, noting cross-border considerations and LMA standards.

Pricing a loan compensates the bank for capital through base rates and credit margins in a standardized, transparent process that reflects client risk, with large corporates paying less than SMEs.

Explore how base rates drive credit pricing and how central bank decisions, through the cost of funds and transmission mechanisms, influence Euribor, interbank rates, and loan pricing.

Assess how banks price credit by adding the credit margin above the base rate, with the margin equal to base margin plus risk premium, rising with tenor and rating.

Explore bonds as tradable credit instruments within the debt capital market, covering issuance steps, information memoranda, roadshows, primary and secondary markets, coupon, tenor, no collateral, and risk.

Explore bond duration concepts, including Macaulay and modified duration, and learn how duration drives bond price sensitivity to interest rate changes.

Model the bond’s cash flows to compute its net present value with the Excel mpv/npv formula and a monthly discount rate.

Discover how refinance loans and state subsidized funding provide cheap capital to banks, enabling them to lend to corporations and boost liquidity for SMEs during COVID-19.

Explore two common refinance loan structures: funding by external parties and bank debt issuance, showing how governments and institutions subsidize loans to lower client rates.

Explore green finance, including green loans and bonds, sustainability linked debt, and the pivotal role of banks in driving the green transformation of the economy.

Analyze quarterly net sales, gross margin, operating expenses, ebitda, and net income to assess profitability and debt service capability; illustrate liquidity and seasonality in an industrial holding company.

Explore how net debt to ebitda measures indebtedness against ebitda and informs covenants in credit contracts; learn to compute, monitor, and graph this ratio in Excel to assess borrower risk.