Corporate Credit and Debt Management Program
February 17 - February 21
Program Overview:
The Corporate Credit and Debt Management Program is designed to provide professionals, financial managers, and executives with the knowledge and tools needed to effectively manage corporate credit, optimize debt structures, and make informed decisions regarding financing and risk management. Participants will learn how to assess creditworthiness, design efficient debt management strategies, and understand the implications of debt on a company’s financial health and growth. This program will focus on the practical aspects of corporate credit evaluation, the tools and techniques for managing debt, and how to strategically leverage credit and debt to enhance organizational performance.
Learning Objectives:
By the end of the program, participants will:
- Understand the fundamentals of corporate credit and debt management.
- Gain skills in assessing the creditworthiness of clients, suppliers, and business partners.
- Learn strategies for structuring and managing corporate debt to optimize financial performance.
- Develop an understanding of the various types of credit and debt instruments available to businesses.
- Learn how to manage credit risk and mitigate potential financial losses.
- Understand the role of debt financing in corporate strategy and its impact on the balance sheet.
- Be equipped with tools to negotiate favorable credit terms and manage debt servicing effectively.
- Gain knowledge of regulatory requirements and compliance issues related to corporate credit and debt management.
Day 1: Introduction to Corporate Credit and Debt Management
Objectives:
- Understand the importance of credit management in corporate finance.
- Learn the key concepts, principles, and processes involved in corporate credit and debt management.
Topics Covered:
- What is Corporate Credit Management?: Definition, objectives, and the role of credit management in business.
- The Credit Lifecycle: Overview of the credit lifecycle from approval to collection.
- Types of Corporate Debt: Differentiating between short-term and long-term debt, secured and unsecured debt, and different debt instruments such as bonds, loans, and credit lines.
- The Role of Debt in Corporate Strategy: Understanding how businesses use debt to finance growth, manage cash flow, and optimize their capital structure.
- Debt Financing vs. Equity Financing: Analyzing the pros and cons of debt and equity as sources of capital for businesses.
Activity:
- Case Study Discussion: Examine a real-world example of a company’s credit and debt strategy, discussing the rationale behind their financing decisions.
Assignment:
- Prepare a report on the current debt structure of a company and analyze how its use of credit impacts its financial performance and risk profile.
Day 2: Credit Risk Assessment and Evaluation
Objectives:
- Learn how to assess the creditworthiness of business partners, suppliers, and clients.
- Understand the tools and techniques used to evaluate the financial stability and risk of lending or extending credit.
Topics Covered:
- Credit Risk Assessment: Understanding the risk involved in extending credit and the factors influencing credit decisions.
- Key Financial Ratios and Metrics: Using financial statements and ratios such as liquidity ratios, leverage ratios, and profitability ratios to assess creditworthiness.
- Credit Scoring and Rating Systems: Introduction to credit scoring models, internal credit ratings, and how external agencies assess credit risk.
- Due Diligence Process: How to conduct due diligence when assessing credit risk, including analyzing the financial health, payment history, and overall reliability of potential clients or partners.
- Credit Policies: Developing and implementing corporate credit policies to define the criteria for extending credit, credit limits, and terms of payment.
Activity:
- Credit Risk Simulation: Participants will work in groups to evaluate the creditworthiness of a potential client or business partner using financial data and risk analysis tools.
Assignment:
- Create a credit policy for your organization, outlining the steps for assessing credit applications, determining credit limits, and setting terms for repayment.
Day 3: Debt Management Strategies and Tools
Objectives:
- Understand how to manage corporate debt efficiently and develop strategies to minimize the cost of debt.
- Learn techniques for optimizing debt structures and reducing financial risk.
Topics Covered:
- Debt Structuring and Optimization: How to design an optimal debt structure by balancing short-term and long-term debt, fixed and variable rates, and leveraging debt instruments for specific purposes.
- Debt Servicing and Repayment Strategies: Techniques for managing cash flows and planning for debt repayment, including refinancing and consolidating debt.
- Cost of Debt: Calculating and analyzing the cost of debt and how to minimize it through refinancing and restructuring.
- Debt Covenants and Terms: Understanding the terms and conditions attached to debt agreements, including covenants, interest rates, and repayment schedules.
- Risk Mitigation in Debt Management: Using hedging strategies, insurance, and other tools to manage interest rate and currency risks associated with debt.
Activity:
- Debt Restructuring Exercise: In groups, participants will design a debt restructuring plan for a company facing liquidity issues and high debt levels, optimizing the debt structure to reduce risk and cost.
Assignment:
- Analyze a company’s debt management practices and propose strategies for improving its debt servicing and reducing the overall cost of debt.
Day 4: Credit Collection and Debt Recovery
Objectives:
- Learn how to manage the credit collection process and reduce bad debt.
- Understand debt recovery methods and legal implications in case of non-payment.
Topics Covered:
- The Credit Collection Process: How to manage overdue accounts and develop effective collection strategies.
- Credit Control Systems: Implementing systems and procedures for monitoring accounts receivable, managing collections, and reducing aging debt.
- Negotiating Payment Terms: Techniques for negotiating favorable payment terms with clients while ensuring timely payment.
- Debt Recovery Methods: Understanding the legal and practical approaches to recovering bad debts, including the use of collection agencies and legal action.
- Avoiding Bad Debt: Best practices for preventing bad debt, including credit checks, payment reminders, and proactive communication with clients.
Activity:
- Role-Playing Exercise: Participants will role-play as credit managers and clients to practice negotiating payment terms and resolving disputes in a debt collection scenario.
Assignment:
- Create a comprehensive credit collection strategy for your organization, including steps for handling overdue accounts and recovering bad debt.
Day 5: Regulatory Compliance and Ethical Considerations in Credit and Debt Management
Objectives:
- Understand the regulatory landscape related to corporate credit and debt management.
- Learn the ethical considerations and best practices for managing credit and debt responsibly.
Topics Covered:
- Regulatory Compliance: Overview of regulations affecting credit and debt management, such as consumer protection laws, financial reporting requirements, and industry-specific regulations (e.g., banking regulations, anti-money laundering).
- Corporate Governance in Credit Management: The role of governance in ensuring ethical practices in credit and debt management.
- Ethical Issues in Debt Management: How to balance business goals with ethical considerations in extending credit and managing debt collection.
- International Credit and Debt Regulations: Understanding the impact of global regulations on cross-border credit and debt management, including the role of international organizations like the World Bank and IMF.
Activity:
- Group Discussion: Participants will discuss ethical dilemmas and regulatory challenges faced by companies in managing credit and debt, proposing solutions based on best practices.
Assignment:
- Write a report on how your organization can improve compliance with relevant regulations and maintain ethical standards in its credit and debt management practices.
Program Delivery:
Format: In-person or virtual (interactive sessions with case studies, group discussions, hands-on exercises, and role-playing).
Duration: 5 full days (6-8 hours per day).
Target Audience: Financial managers, CFOs, credit managers, accountants, business owners, and professionals responsible for managing corporate credit, debt, or financing.
Certification:
Upon successful completion of the program, participants will receive a Certificate in Corporate Credit and Debt Management, demonstrating their expertise in managing corporate credit and debt effectively.
