Fundamentals of US Public Finance Credit Risk

Fitch Learning

How long?

  • 2 days
  • online

Fitch Learning

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About the course

Since 2003, Fitch Learning’s industry experts have been delivering world-renowned virtual training programs to learners across the globe. Benefits include:

  • World-class video conferencing technology
  • Fully interactive, engage and network with peers using break out rooms, quizzes and polls
  • On-hand technical support team throughout
  • Attend from anywhere, across four time zones
  • Save time and costs on travel

Course Times

  • This course takes place over two days, with six hours per day
  • EST 08.30-14.30

Course Objectives CPD Certified

The US Public finance market contains numerous diverse issuers. Its tax-exempt nature has created wide participation of retail investors. Relatively small issuers can access publicly traded bond markets. Historically default risk has been low but this has changed dramatically over the last decade. This two-day course will provide participants with the means to understand the legal foundations of this sector and identify risk aspects between tax and revenue supported issuers. Unique aspects of other sub-sectors will also be covered. An overview of US Government Accounting Standards will provide the basis for reviewing financial statements. Using Fitch Ratings concepts the participants will utilize case studies to understand the relative risks of issuers and determine key credit ratings drivers.

Course Content

Overview of the US Public Finance Market The participants will develop an understanding of how public finance market is organized and how its structure relates to relative levels of risk for issuers.

  • Background of issuer sectors
  • History and scope of the market
  • Legal Structure of the US Public Finance Issuance
  • Exercise: Default Case Studies and fatal flaws

Overview of US Public Finance Credit Analysis and Decision Framework

A systematic approach of risk identification and relative assessment will provide the core process of analyzing information related to credit analysis and provide the input for decision making.

  • Purpose
  • Payback
  • Risk
  • Structure
  • Exercise: Match bond issue with the issuing entity
  • Exercise: Bond issue risk identification

Financial Analysis of US Government Entities

Develop an understanding and an ability to utilize financial statements developed under GASB principals.

  • Financial presentation under Government Accounting Standards
  • GASB Accounting Principals
  • Statement of Net Position
  • Statement of Activities
  • Notes to Financial Statements
  • Fund Financial Statements
  • Case Study: GASB concept recognition as related to financial statements of a governmental entity.

Credit Risk Assessment of Tax Supported Entities

An understanding of the relative credit default risk will be assessed through the understanding of the following drivers:

  • Foundational Economic and Recessionary Scenario Analysis: Understanding and identifying the drivers of economic growth or volatility will provide the foundation for assessment of the key risk drivers.
  • Revenue Framework: Understand the nature of the ability to raise tax revenues and how volatile they are.
  • Expenditure Framework: Determine how expenditures will grow in the future and the ability to reduce expenditures during recessionary periods.
  • Long Term Liability Burden: Assess and adjust existing debt levels for items such as pension obligations or other unfunded expenses.
  • Operating Performance: Determine the relative ability to manage temporary financing gaps
  • Asymmetric Risks: Identify other risk factors that increase default related risks or uncertainty.
  • Case Study: Determine key credit rating drivers of a tax supported issuer.

Credit Risk Assessment of Revenue Supported Entities

An understanding of the relative credit default risk will be assessed through the understanding of the following drivers:

  • Revenue Defensibility: Understand the nature of demand volatility, pricing characteristics, and legal framework
  • Operating Risk: Identify key aspects of cost structure, its volatility and the life cycle of the revenue generating entity.
  • Financial Profile: Assess the relative level of leverage and liquidity as it relates to revenue and operating risk.
  • Asymmetric Risks: Identify other risk factors that increase default related risks or uncertainty.
  • Case Study: Determine key credit rating drivers of a revenue supported issuer.

Key issues Related to Specific Sectors

Participants will develop an understanding of specialized aspects of significant sub-sectors such as:

  • Airports
  • College and Universities
  • Sports Facilities
  • School Districts
  • Exercise: Match key credit risk drivers with specialized sub-sector issuers

Current State of the Market

Review of current concerns and developing issues as related to US Public Finance Sectors.

Fundamentals of US Public Finance Credit Risk at Fitch Learning

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Disclaimer

Coursalytics is an independent platform to find, compare, and book executive courses. Coursalytics is not endorsed by, sponsored by, or otherwise affiliated with any business school or university.

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