Description

Understand the tools a creditor uses to mitigate the risk of capital loss, outlined in the credit memorandum and term sheet.

Learning Objectives

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1. Identify the key components and purpose of a credit memorandum, including its role in loan documentation and risk assessment.
2. Analyze the structure of a term sheet and its importance in mitigating default risk and loss given default (LGD) risk.
3. Evaluate the effectiveness of different loan types and their purposes in minimizing refinancing risk and aligning with capital needs.
4. Compare the pricing mechanisms and fee structures for investment-grade debt versus leveraged loans, focusing on the impact of credit ratings and leverage grids.
5. Assess the strategies used in loan syndication to manage risk and exposure, including the roles of lead arrangers and the syndication process.