Fresh from his fruitful stint at BDO Unibank as the Vice President for Credit Risk Management, Chairman Machica successfully completed the intensive 4-day training on Corporate Credit Analysis conducted by FitchTraining at the Renaissance Hongkong Harbour View Hotel, Hong Kong, on June 5-8, 2012.
The training was aimed at enhancing analytic skills using structured and systematic approach to evaluate the credit standing of a company and the relative attractiveness of the risk – return profile of the investing / lending proposition. The program draws participants from South Korea, Philippines, Indonesia, China, Mongolia, and Qatar who are bankers, finance executives, and asset managers. The Fitch Group contracted seasoned trainer and industry expert, Tammy Lam, to facilitate and to deliver the entire training. Ms. Lam is a Consultant at Asia Business Development and an IFC Director-designate at a certain finance institution in China. She is also a former Citibank credit & risk officer in Hong Kong. The FitchGroup is composed of FitchRatings and FitchSolutions. FitchTraining is one of FitchSolutions’ core services. Aside from training, FitchSolutions include research services, risk and performance analysis, structured finance solutions, and pricing and valuation. The Group is headquartered in London.
Just like the previous programs completed by Chairman Machica overseas, this endeavour has its unique and practical approach of imparting knowledge to its participants. The program concentrated on case studies, group works, and lectures. Participants were trained to be focused and concise in developing and articulating credit judgements. The analytic tools and frameworks were taught and demonstrated through a wide variety of live examples, up to date case studies, and exercises. “It was highly interactive, challenging, and comprehensive” Chairman Machica shared. Case studies were drawn from a range of industries and regions. The credit issue of ZTE was one of the highlighted corporate cases thoroughly discussed. The purpose of using extensive practical exercises and case studies was to reinforce key learning points.
In addition, the Corporate Credit Analysis training has put emphasis on the structured approach to analysis aimed at introducing and reinforcing an analysis of a transaction. The case studies allow the participants to evaluate the business needs (purpose of transaction) and to focus on the credit analysis (payback, risk, and structure). In fact, the entire training can be summarized into a 4 step model: Purpose – Payback – Risks – Structure.
Purpose: identifying who is the borrower and for what purpose the funds are to be used.
Payback: determining the primary and secondary sources of payback.
Risk: assessing the risk which could jeopardize repayment.
Structure: evaluating the transaction’s risks and rewards.
The step enables the analyst to focus on the main drivers of credit and to reach a conclusion as to whether a debt provider is being compensated appropriately for the risks.
The entire training has enabled and equipped the participants to apply the 4- step model, to evaluate company performance, to use market indicators in identifying the key factors that drive company’s future performance, to use a cash-flow approach in ascertaining a company’s ability to refinance, and to review debt structures. These are all important theoretical and technical knowledge and practices essential for industry practitioners and leaders. When asked about his Fitch Training endeavour, Chairman Machica described it as “very professional in their instructions, excellent balance of practical exercises and theories, and uses latest and tailored-fit industry case studies”.