Analysing an Issuer's Credit

You are not lending to a company. You are buying one specific claim, sitting at one specific point in a structure. This course teaches you to analyse that claim, and to find the distance between it and the cash flows that would repay it.

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Six things you will be able to do

Go past the credit rating. Learn to analyse the instrument you actually hold, and where it sits when things go wrong.

01 Identify the actual issuerWhich legal entity signed, and what that entity owns on its own.
02 Map the capital stackEvery claim ranked, from secured lenders down to the equity beneath you.
03 Measure structural subordinationHow many entities sit between your claim and the operating cash flows.
04 Read the security packageWhat is actually pledged, to whom, and what is left over for everyone else.
05 Test the covenantsWhat they prevent, what they permit, and the baskets that quietly allow more debt above you.
06 Estimate recoveryRun the value through the waterfall and see what reaches your claim.
The outcome

What changes after this course

You stop asking whether the company is good and start asking whether this claim gets paid, from which entity, and behind how many others.

A specific claim assessed, named down to the issuing entity and its ranking

The full capital stack mapped, with the distance to operating cash flows measured

A recovery estimate for your position, not an opinion about the business

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