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Training Course Summary:

At the end of this seminar delegates will be familiar with the basic credit derivatives, their raison d’être, structures and pricing factors. They will appreciate the risks transferred by these products (and the residual risks that are not). In addition, delegates will appreciate the uses of credit derivatives for corporate financing structures and the circumstances in which they might be utilised for hedging risk, both from a client standpoint and from that of the corporate banker.

Training Course Overview/Content:

The Concept of Credit Derivatives
Pressure on regulatory capital within international banks
Need for investment uplift
Greater awareness of credit risk
Better tools to assess credit risk
Perceived opportunities for arbitrage
Need to diversify and / or dissipate credit risk
Disappearance of other trading opportunities
Commoditising of interest rate and foreign exchange derivatives
EMU
Liquidity issues
The state of the market to date, and the expectations for future
development.

Credit Derivative Structures
Default swap
Credit linked note
Total return swap
Spread future
Spread option
Cross guarantee (default swap combo).
Other structures

Practical Issues
Models
Accounting issues
Management and control regime requirements
Integrating systems
Issues relating to the regulatory environment