Accounting / Finance

In addition to product and market knowledge, the course discusses in detail the metrics used by the bank to control counterparty credit risk. This normally includes understanding how volatility is the “source” of counterparty credit risk, how volatility is measured and how the bank uses it to “forecast” the amount that its clients could owe it.
The above topics are reinforced by means of real deal case studies designed to show how the risks are measured using real life examples.

Target Audience
Junior to mid-level front office, risk, financial controls and operations staff with product control, management performance review, and operational control responsibilities for derivatives businesses.

Prerequisite Knowledge or Courses
Participants will complete a short pre-course study using some of Intuition’s financial markets e-learning materials.

The knowledge and experience required is typical of the target audience.

Learning Approach
Classroom and Pre-learning
• Market Risk – Identification & Measurement
• VAR – An Introduction
• Swaps – Constant Maturity Swaps
• Swaps – Applications for Corporates
• Swaps – Credit Exposure
• Swaps – Documentation & Settlement
•Target Redemption Notes (TARNs)

PSE, PSLE and CVA Overview
• Bank positive fair market value
• FX, interest rate swaps, options, commodities
• Monte Carlo approach to PSE, PSLE and CVA
• Volatility as the main driver of counterparty risk
• Credit Valuation Adjustments
• PSE and PSLE Exercise

Interest Rate Swaps
• Introducing swaps and their main uses
• Swap rates and yields
• Building the swap pricing curve
• Discount factors calculated from the swap curve
• Libor forward rates
• Swap pricing
• Fair market value for swaps

Day 2
Interest Rate Swap Case Study
• Floating rate borrower
• Inception value
• Swap P&L as rates change
• How the bank accounts for the swap P&L

Volatility
• Volatility from price changes
• Log-normal modeling of prices and rates
• Comparing real life with the bell curve
• Volatility smiles and smirks
• Volatility term structure
• “Forecasting” future rate moves using volatility

Understanding Risk Measures
• Fair market value (FMV)
• Changes in FMV as the source of risk
• Value at Risk (VaR)
• Pre-settlement exposure (PSE)
• Pre-settlement loan equivalent (PSLE)
• Credit Valuation Adjustments (CVA)
• Calculating risk measures in an interest rate swap
• Obtaining and understanding the classic humped credit risk profile in an interest rate swap

Day 3
Options
• Long and short calls
• Long and short puts
• Payoffs to the buyer and the seller
• Options and “the money”
• Comparing in-, at- and out-of-the-money
• American, European and Bermudan options
• Intuitive approach to option valuation

FX Products
• Money markets and foreign exchange
• FX trading and market size
• Base and terms currencies
• Non Deliverable Forward (NDF) for an exporter
• Understanding the trade
• Financial controls
• Market risk and VaR
• Counterparty credit risk and PSE/PSLE
• Right way and wrong way exposure
• FX option for an exporter
• Understanding the trade
• Financial controls
• Market risk and VaR
• Counterparty credit risk and PSE/PSLE
• Right way and wrong way exposure

Foreign Exchange Exercises
• Cross currency swap
• Cross currency swap right way and wrong way exposure
• Exporter uses options to construct hedges
• Basket FX options and PSE
• Exporter multi-month exposure, forwards, par forwards and options and dynamics of PSE

Commodity Derivatives
• Energy derivative markets and products
• Client profiles
• Client hedging activity

Commodity Exercises
• Copper caps and floors
• Client short oil floors and PSE
• Jet fuel floor structures and PSE
• More copper swaps, caps and floors
• Oil-linked bank debt

Credit Risk Mitigation Techniques
• Collateralization
• Re-couponing
• Early termination
• Case studies for each risk mitigant

Target Audience
The programme is targeted at:
• Buy side and Sell side research
• Credit Analysts
• Risk Managers

Learning Approach
The course is very ‘hands-on’ and based entirely in excel. Intuiton will facilitate the learning process through a combination of:

• Presentation of core knowledge and concepts using power point slides
• Press articles and real life case studies
• Short exercises (in excel and word)
• Financial models, to teach delegates the principles of financial modelling
• Regular summaries, to remind delegates of the key points of each session
• End of Day quizzes, to confirm the achievement of the learning outcomes
• Course summaries, as a take away and reminder of the key learning points

Course Content
Draft Pre-work (Dependant on learner knowledge)
• Lending – An Introduction
• Bonds- An Introduction
• Equities – An Introduction
• Corporate Finance – Measuring Business Performance (Free Cash Flow)
• Corporate Finance – Measuring Business Performance (Economic Profit)
• Corporate Finance – Cost of Capital
• Credit Analysis – An Introduction
• Financial Analysis – An Introduction
• Principles of Credit Extension
• Debt Capacity & Cash Flow Analysis

Day 1 -Afternoon Session
Market valuation, covenants and debt capacity
• Delegates will apply market multiples to derive a market based valuation and compare this against the fundamental valuation derived in Session 1
• They will examine covenant ratios and constraints and analyze current headroom and debt capacity
• They will perform scenario analysis/ stress testing to assess financial flexibility
• Finally, they will build a ‘sources and uses of funds’ table and consider alternative deal structures and funding sources
• During the afternoon a guest speaker will discuss the dynamics of the recent Dana / Bow Valley transaction, including strategic, capital structure, valuation and execution aspects, with Q&A.
• Market based valuation techniques
• Comparing market vs. fundamental value
• Capitalizing operating leases to compare like for like Enterprise Values
• Covenant ratios, debt capacity and fixed/floating mix
• Sensitivity analysis of key input assumptions vs. debt capacity
• Sources and Uses of Funds table
• Alternative offer structures (all cash, all shares and ‘mix and match’) and funding sources (equity, loan notes, bridge facility, Senior debt, bonds and mezzanine)

Day 2 – Morning Session
Equity Issuance, synergies and proforma effects
• The session will commence with an overview of equity raising techniques
• Delegates will then examine the pro forma financial effects of an acquisition, under different deal structures (eps accretion/ dilution, gearing and coverage ratios) and determine shareholder value creation/ destruction
• They will consider the strategic, operating and financial implications of a deal, and how synergies can create shareholder value
• They will analyze covenant ratios and constraints, headroom and debt capacity
• Equity Issuance Techniques
• Rights Issues (Signaling Effect)
• Open Offer / Placing
• Convertible Bonds
• Proforma financial effects of a combination:
• All share deal
• All cash deal
• Mixture of cash & shares
• Identifying, quantifying and valuing synergies
• Proforma covenants and headroom
• Scenario analysis and stress testing

Day 2 – Afternoon Session
• Negotiation dynamics, risk management, offer timetable and course assessment
• Delegates will consider Corporate Risk Management aspects to the transaction
• They will consider the negotiation tactics and bid/offer parameters to reach an agreed deal
• They will learn key aspects of the UK takeover code, offer timetable and documentation required
• Assess FX, Interest Rate, Commodity, Equity and Credit Risks and hedging strategies
• Negotiate an agreed offer price and structure
• UK takeover code, deal timetable and approval process

This two-module, Level 7 qualification is specifically designed for those who have successfully completed the Professional Certificate in Investment Fund Services and who wish to build on their knowledge. This Professional Diploma moves deeper into the area of Alternative Investments, Legal, Compliance and Taxation areas of the investment funds industry.

This programme is offered in partnership with the Irish Funds Industry Association (IFIA) and is designed to enhance the knowledge and experience gained at Professional Certificate level.

What Learning Supports are available?
• Specifically written comprehensive and user-friendly study manuals
• Access to the online Student Centre (using your password which will be sent to you following registration), including:
• Online learning plan, including module outline and study plan
• Online student handbook
• Online lecture and examination schedules
• Lecture notes and handouts
• Past examination papers
• Secure online access to your examination results and correspondence
• Lecturer contact through an email helpline
• Weekly lectures held in Dublin and Limerick – subject to adequate student demand
• Revision weekend, held prior to examinations
• Exam venues in Athlone, Cork, Dublin, Galway, Letterkenny, Limerick and Waterford – subject to demand.

High Level Topics for Major Focus:
• Leadership Mindset
• One to One Engagement
• Team Synergy
• Innovation in the Business

Logic – Programme Philosophy & Flow
The programme is designed to facilitate and maximise the developmental journey, and is logically structured over 4 sessions of 2 days per session, with approximately 3 to 6 weeks interval between each session to facilitate integration of the learning and on-going development of the manager.

The overarching philosophy is to boost performance for the individual, their direct reports, their team, and the business.

Session 1 – Self
Effective leaders have an effective mindset. The leader must first know, understand and be able to lead him/herself before they can lead others. Using a heavily validated assessment tool this session will enlighten and benchmark the manager about their leadership style in terms of its sustainable effectiveness, and will demonstrate how they can improve that style to be even more effective.

Session 2 – Others
One to One engagement – Having identified and understood how we can better lead ourselves, the managers turn to look at those around them and focus on inspiring, motivating, and leading the thinking and behaviour of both their subordinates and their peers as individuals.

Session 3 – Team Synergy
If nobody is perfect, but a team can be, then the manager is provided with the tools to build high performance teams, capable of delivering more than just the individual parts, thereby cultivating a culture of synergy.

Session 4 – Innovation in the business
Moving beyond what the managers currently think is possible is the key to innovation. This session gives the managers the experience of going beyond what they currently think is possible, and empowers them with the tools to innovate and tap into more of the team’s latent creativity.

Buddy System
IMC&P strongly recommend the commencement of an internal coaching/buddying system for participants of the course. IMC&P will arrange participants into pairs and ensure that there is at least one peer-to-peer coaching meeting for each pair between sessions. Participants will be introduced to the concepts of coaching, determine their own coaching style, learn how to give positive and negative feedback and ultimately have inspiring coaching conversations.

Session 2
• Review actions and development
• Coaching Diamond
• Creating world leading standards
• Observing & Measuring
• Feedback that motivates
• Coaching Continuum
• Hosting performance improvement conversations
• Activity – “Coach Co-Achieve”
• Review & action plan

Session 3
• Review actions and development
• Building high performance teams 1
• History of teams in business
• Why & When to use
• Stages of team development
• Characteristics of High Performance Teams
• Building high performance teams 2
• Activity – “Team Win”
• Debrief – Apply learning to own team
• Review & action plan

Session 4
• Review actions and development
• Origins of creativity
• Creativity & Teams
• Creating a “What’s Possible?” Mindset
• “Situation / Decision / Consequence” Model
• Innovation in a Compliance & Regulation environment
• Review Entire Programme & Action plans.