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Principles of Borrowing
Key Facts
| Location | London |
| Length | 1 day |
| Fees | ACT Members and Students £575.00 Non Members |
| Max group size | 25 |
Book now
Contact
For further information about this course please contact:
Samantha Baglioni
Training Development Manager
T: +44 (0)20 7847 2559
E: training@treasurers.org
Further information
What is it about?
This course is aimed at those involved in financial strategy, looking for an introduction to the theory and practice of debt, its instruments and markets.
Borrowing is looked at firstly from the view of the borrower, setting out reasons to borrow and then from the lender’s perspective, using that understanding to present a robust business case to secure the funding and address lenders’ key concerns.
The course covers the key sources and markets for borrowed funds and goes on to look at some implications of borrowing for risk management.
Participants on this course may also be interested in the Borrowing and Financial Strategy course to further develop their knowledge.
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Table of Contents [hide]
Programme
Introduction
- The nature and history of debt
- Debt v equity
- Why do companies borrow?
Credit risk
- What is credit risk and why is it important?
- Measures of credit risk
- Debt capacity
- Security and subordination
- Business and financial risk
- Credit ratings
Markets for borrowing
- Sources of borrowed funds
- Committed versus uncommitted funding
- Banks vs bonds
- Markets - public vs private
- Some typical borrowing instruments
- Some alternative borrowing instruments (leasing, hybrids, convertibles etc)?
The lending contract
- The cost of borrowing
- Ratings / spreads
- Terms of lending
- Key aspects of documentation
Credit risk exercise
Key financial risks in borrowing
- A risk framework
- Borrowing can be used to manage some risks e.g. Liquidity and Cost of Capital
- But by borrowing, the firm is exposed to others:
- refinancing risk
- repricing risk
- interest rate risk
- currency risk
Factors in deciding to lend (based on EU SME toolkit)
- Credit assessment
- Presenting a borrowing case
How do you benefit?
You will gain an overview of why firms borrow, the broad sources of debt funding and the range of instruments available. You will discover the importance and nature of credit risk and how this is reflected in the pricing and an awareness of the terms and conditions that can be contained within borrowing contracts. You will also gain an appreciation of the financial risks implied for the firm when it borrows, and how these might be managed.
This one-day course involves practical exercises to apply the content to real situations.
Who is it for?
- CFOs, FDs and corporate treasury personnel
- Accountants, auditors and analysts
- Other financial professionals involved in arranging or administering corporate borrowing programmes
