This document summarizes Cushman & Wakefield's evaluation solutions service. It discusses when regulatory agencies allow for evaluations instead of appraisals, including for transactions under $250,000, business loans under $1,000,000, and renewals/refinances. Evaluations typically cost less than appraisals. Cushman & Wakefield's evaluations are completed by licensed professionals and provide a customized report drawing on their brokerage network, to help financial institutions reduce costs while meeting regulatory requirements.
This document discusses the five C's of risk assessment: Character, Capacity, Capital, Conditions, and Collateral. It provides details on how each of the five C's relates to evaluating risks in credit transactions, including willingness and ability to pay, financial status, industry conditions, available collateral, and other factors that influence the risk of non-payment. The document was presented by Fahad Zafar and provides his contact information for any questions.
Bovill briefing - Evidencing Suitability - June 2016bovill
It’s been on the agenda for ages, and yet suitability remains the FCA’s over-riding concern in the Wealth Management and Financial Advice sectors. We’re now five years on from the 2011 ‘Dear CEO’ letter, but it’s clear from recent supervisory activity that the regulator believes the majority of client files are still failing to evidence suitability. The recent spate of s166 skilled person notices, issued in the wake of the 2015 wealth sector suitability review, are a sure sign that patience has run out.
Wendy Fine is seeking a position that utilizes her strong organizational, communication, and leadership skills. She has over 15 years of experience in the insurance industry, holding roles such as Pricing Analyst/Underwriter, Administrative Assistant, Customer Service Representative, Claims Adjuster, and Licensing Analyst. She has a bachelor's degree in Risk Management and Insurance from Georgia State University and holds several insurance licenses.
Information on the five C's of credit, bankruptcy proceedings, credit policy, credit investigations, credit fraud, credit decisions, customer visits, the sales department, and the vredit department.
Risk Rating Improvements for the ALLL in Banks and Credit UnionsLibby Bierman
Risk Ratings will play a pivotal role under CECL at banks and credit unions. In this presentation, find out how to improve risk rating systems, including PD/LGD or Probability of Default as well as internal matrices.
This document discusses the five C's of risk assessment: Character, Capacity, Capital, Conditions, and Collateral. It provides details on how each of the five C's relates to evaluating risks in credit transactions, including willingness and ability to pay, financial status, industry conditions, available collateral, and other factors that influence the risk of non-payment. The document was presented by Fahad Zafar and provides his contact information for any questions.
Bovill briefing - Evidencing Suitability - June 2016bovill
It’s been on the agenda for ages, and yet suitability remains the FCA’s over-riding concern in the Wealth Management and Financial Advice sectors. We’re now five years on from the 2011 ‘Dear CEO’ letter, but it’s clear from recent supervisory activity that the regulator believes the majority of client files are still failing to evidence suitability. The recent spate of s166 skilled person notices, issued in the wake of the 2015 wealth sector suitability review, are a sure sign that patience has run out.
Wendy Fine is seeking a position that utilizes her strong organizational, communication, and leadership skills. She has over 15 years of experience in the insurance industry, holding roles such as Pricing Analyst/Underwriter, Administrative Assistant, Customer Service Representative, Claims Adjuster, and Licensing Analyst. She has a bachelor's degree in Risk Management and Insurance from Georgia State University and holds several insurance licenses.
Information on the five C's of credit, bankruptcy proceedings, credit policy, credit investigations, credit fraud, credit decisions, customer visits, the sales department, and the vredit department.
Risk Rating Improvements for the ALLL in Banks and Credit UnionsLibby Bierman
Risk Ratings will play a pivotal role under CECL at banks and credit unions. In this presentation, find out how to improve risk rating systems, including PD/LGD or Probability of Default as well as internal matrices.
Legal Project Management (LPM) provides a disciplined, proactive approach to managing law firm resources to help law firms better serve clients. It involves defining the scope of engagement, estimating budgets, identifying necessary resources, and monitoring the project through completion. LPM uses structured, repeatable processes like planning, managing, and regularly communicating with the client to prevent scope creep and measure outcomes. It benefits both law firms and clients by promoting transparency, predictability, and cost efficiency while still achieving desired legal results.
This document provides information about a business loan from HDFC Bank, including eligibility requirements, key features and benefits, types of business loans offered, applicable interest rates and fees, and documentation required. Specifically, it outlines that HDFC Bank offers business loans for self-employed individuals and businesses with a minimum annual income of Rs. 1.5 lakhs and minimum 3 years of business experience. Loan amounts range from Rs. 15 lakhs to Rs. 40 lakhs with repayment periods of 12-36 months and interest rates from 17-22%.
This document discusses a novel stochastic valuation model for improving pharmaceutical portfolio investment decisions by addressing risk from "portfolio attrition". The model provides insights lacking from traditional discounted cash flow methods by quantifying the median/range of expected portfolio value creation over time based on industry attrition rates. It analyzes probabilities with a high level of certainty and metrics like portfolio payoff ratio and ROI. Case studies show how the model helped justify a higher acquisition price and find an optimal strategy for a biotech company given financing constraints.
Effective Credit and Investment Management of BangladeshJahid Khan Rahat
This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.
Mainak Kumar Dhar has over 7 years of experience in investment banking risk analysis, finance data analytics, and reporting. He is skilled in data analysis tools like SQL, Business Objects, and reconciliation tools. Currently he works as a Specialist at StateStreet HCL Services, where his responsibilities include reconciliation transitions, break analysis, reporting, and client management. Previously he worked as a Senior Analyst and Financial Analyst, where he performed data reconciliation and analysis between risk and finance departments. He has a Post-Graduation Diploma in Management and Bachelor's degree in Commerce.
The document discusses the five key factors, or "Cs of Credit", that lenders consider when evaluating loan applications: 1) Condition refers to the overall economic environment that could impact the applicant's industry; 2) Capacity is the applicant's ability to repay the loan based on their financial health; 3) Collateral includes assets that can be pledged as security for the loan; 4) Capital is the amount of personal funds the applicant has invested in their business; and 5) Character involves the applicant's integrity and trustworthiness, which are important in determining if they will be approved for a loan.
profiling creditworthiness &entrepreneurship using psychometric toolsRaj Dravid
In Agriculture last mile connect is critical. How do we ensure that the right kind of leadership and creditworthiness is determined using state of art psychometric profiling tools?
The UK regulator places primacy on outcomes that are client-centric as the determining factor to whether sufficient research and due diligence has been done.
This presentation provides an overview of PrecisionLender and its commercial loan pricing and portfolio management solution. PrecisionLender helps relationship managers win deals, deepen client relationships, and build their personal brand by quickly crafting customized loan solutions. The presentation demonstrates PrecisionLender's capabilities, discusses its implementation process, and outlines how it provides quantitative and qualitative benefits across the deal lifecycle from new business development to ongoing portfolio management. PrecisionLender has been implemented in over 200 banks to empower relationship managers and drive profitable revenue growth.
This document summarizes regulatory scrutiny faced by community banks and provides recommendations for strengthening risk assessment processes. It suggests banks evaluate their initial risk assessments, loan review processes, portfolio management, and allowance for loan and lease losses (ALLL) methodology to ensure these areas will withstand regulatory scrutiny. Outside reviews can help banks optimize credit administration and prepare for their next exam.
This document summarizes a presentation made by CA Smita Rajpurkar on rating concepts and methodologies at CARE. It discusses CARE's key business lines of ratings for corporates, financial sectors, public finance and infrastructure. It then outlines CARE's rating process, key risk factors considered, and approach to ratings surveillance. The document also provides details on CARE's rating scale and committee, and concludes with highlights of key rating factors for construction, roads and real estate sectors.
Michael Rizzo has 19 years of experience in claims handling and investigations. He has held roles such as Senior Homeowner Adjuster, Senior Casualty Adjuster, Litigation/Casualty Supervisor, Auto Property Supervisor, and Litigation Specialist. He has a track record of managing teams, meeting quality and customer service metrics, and implementing process improvements. Rizzo has worked for several insurance companies including MetLife, Liberty Mutual, Sedgwick CMS, and Fireman's Fund. He holds a Bachelor's degree in Criminal Justice.
Commercial credit analysis can introduce a lot of complexities into the banking organization: additional underwriting standards, new financial data to collect and interpret, complex relationships with multiple entities and commingled incomes, additional regulatory focus, etc.
Sageworks Senior Consultant Peter Brown covers some of the basics that come with credit analysis including what data to consider, how to analyze the data, when to introduce benchmarking and automation and other topics.
S. Mark Brumbelow gave a presentation on succession planning basics. He outlined identifying key players in the succession process such as owners, executives, employees and advisors. Goals for transition include defining roles and developing candidates. Tax opportunities include gain deferral for sellers and eased cash flow for buyers through organizational structure. Challenges include valuation, structure impacts, and family dynamics. The presentation emphasized starting succession planning early, aligning it to the business, and developing an alliance network.
This summary provides an overview of Karen Rockoff's professional experience:
Karen Rockoff has over 20 years of experience in risk management and credit analysis. She most recently served as Chief Risk Officer at Peapack-Gladstone Bank from 2013 to 2016, where she created an enterprise risk management program and managed regulatory relationships. Prior to that, she spent 17 years at Morgan Stanley in various credit risk management roles, including leading coverage of a $4 billion healthcare client portfolio and managing new product credit approvals. She began her career as a Senior Credit Analyst at Nomura Securities International.
Commercial Real Estate Appraisal: How lenders can improve their CRE appraisal...Libby Bierman
Over the past 5 years the appraisal environment has seen many changes that have caused uncertainty and confusion. Despite the positive economic environment, the appraisal management and review process is still causing issues for financial institutions of all sizes. Sageworks has invited appraisal review and valuation management experts from MountainSeed to discuss the most common issues for lenders today.
Managing distressed private equity and credit investmentsSteven Rosenblum
Many family offices, pensions, endowments and other investors that have historically allocated capital to private equity and credit funds (“Investors”) are increasingly investing in transactions directly. To achieve similar returns, Investors must replicate the capabilities of institutional asset managers in sourcing opportunities, structuring transactions and investment oversight. When unexpected problems occur post-investment, Investors often lack the resources and internal expertise to optimally manage the position, especially in distressed situations. These include risk management practices to help prevent investments from becoming distressed, activist expertise to manage distressed situations and strategies to recover investments after they have become impaired. This article discusses best practices in each of these areas that help Investors maximize the value of problematic investments.
This document summarizes a presentation about preparing an ambulatory surgery center (ASC) for sale. The presenters discuss defining the ASC's goals and wants, performing a SWOT analysis, getting partner buy-in, assembling an advisory team, cleaning up finances, determining value drivers and competitive differentiators, addressing weaknesses and deal killers, handling underperforming physicians, and the stages of due diligence. The presentation provides ASC owners and administrators guidance on properly preparing their facility for a potential sale.
1. Credit ratings are evaluations of a debtor's ability to pay back debt and likelihood of default, determined by credit ratings agencies based on both public and private information.
2. Credit ratings are not based on formulas but on the judgment and experience of agency analysts in determining what information should be considered for a rating.
3. Poor credit ratings indicate a high risk of default based on the agency's analysis of the entity's history and long term economic prospects.
NewOak provides compliance management and regulatory consulting services to financial institutions. Their services help clients minimize compliance risks, improve customer satisfaction, obtain compliance assurance, and develop mitigation strategies. NewOak's suite of services includes policy and procedures reviews, vendor risk assessments, loan reviews, and remediation services. They have experience in areas like complaint management, monitoring, training, and independent audits. NewOak aims to help clients stay ahead of increasing regulatory challenges through customized compliance solutions.
This document provides an overview of credit ratings. It begins by defining credit ratings as evaluations of a debtor's ability to pay back debt and likelihood of default. Credit ratings are determined by credit rating agencies who analyze both public and private information. The document then discusses the different types of ratings including sovereign, short-term, and corporate credit ratings. It explains the credit rating methodology and process. Finally, the benefits and drawbacks of credit ratings for both investors and companies are outlined. The major credit rating agencies operating in India are also listed.
Legal Project Management (LPM) provides a disciplined, proactive approach to managing law firm resources to help law firms better serve clients. It involves defining the scope of engagement, estimating budgets, identifying necessary resources, and monitoring the project through completion. LPM uses structured, repeatable processes like planning, managing, and regularly communicating with the client to prevent scope creep and measure outcomes. It benefits both law firms and clients by promoting transparency, predictability, and cost efficiency while still achieving desired legal results.
This document provides information about a business loan from HDFC Bank, including eligibility requirements, key features and benefits, types of business loans offered, applicable interest rates and fees, and documentation required. Specifically, it outlines that HDFC Bank offers business loans for self-employed individuals and businesses with a minimum annual income of Rs. 1.5 lakhs and minimum 3 years of business experience. Loan amounts range from Rs. 15 lakhs to Rs. 40 lakhs with repayment periods of 12-36 months and interest rates from 17-22%.
This document discusses a novel stochastic valuation model for improving pharmaceutical portfolio investment decisions by addressing risk from "portfolio attrition". The model provides insights lacking from traditional discounted cash flow methods by quantifying the median/range of expected portfolio value creation over time based on industry attrition rates. It analyzes probabilities with a high level of certainty and metrics like portfolio payoff ratio and ROI. Case studies show how the model helped justify a higher acquisition price and find an optimal strategy for a biotech company given financing constraints.
Effective Credit and Investment Management of BangladeshJahid Khan Rahat
This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.This study aims to unveil the bank’s attitude towards credit and investment management. In Bangladesh there is mainly two categories banking system that is Islamic Banking system and conventional Banking system. Those system has totally different credit and investment policy. Islami Bank is based on Sharia. So, they invest as a partner of any business organization. As a result, it is sharing their profit not the interest. On the other hand, conventional bank based in interest system. So, their investment and credit policy are totally different from each other. In this research we investigate the relationship of credit or investment initiates and profitability of bank. We used secondary research method in completing this relationship of which we collect qualitative data from different sources.
Mainak Kumar Dhar has over 7 years of experience in investment banking risk analysis, finance data analytics, and reporting. He is skilled in data analysis tools like SQL, Business Objects, and reconciliation tools. Currently he works as a Specialist at StateStreet HCL Services, where his responsibilities include reconciliation transitions, break analysis, reporting, and client management. Previously he worked as a Senior Analyst and Financial Analyst, where he performed data reconciliation and analysis between risk and finance departments. He has a Post-Graduation Diploma in Management and Bachelor's degree in Commerce.
The document discusses the five key factors, or "Cs of Credit", that lenders consider when evaluating loan applications: 1) Condition refers to the overall economic environment that could impact the applicant's industry; 2) Capacity is the applicant's ability to repay the loan based on their financial health; 3) Collateral includes assets that can be pledged as security for the loan; 4) Capital is the amount of personal funds the applicant has invested in their business; and 5) Character involves the applicant's integrity and trustworthiness, which are important in determining if they will be approved for a loan.
profiling creditworthiness &entrepreneurship using psychometric toolsRaj Dravid
In Agriculture last mile connect is critical. How do we ensure that the right kind of leadership and creditworthiness is determined using state of art psychometric profiling tools?
The UK regulator places primacy on outcomes that are client-centric as the determining factor to whether sufficient research and due diligence has been done.
This presentation provides an overview of PrecisionLender and its commercial loan pricing and portfolio management solution. PrecisionLender helps relationship managers win deals, deepen client relationships, and build their personal brand by quickly crafting customized loan solutions. The presentation demonstrates PrecisionLender's capabilities, discusses its implementation process, and outlines how it provides quantitative and qualitative benefits across the deal lifecycle from new business development to ongoing portfolio management. PrecisionLender has been implemented in over 200 banks to empower relationship managers and drive profitable revenue growth.
This document summarizes regulatory scrutiny faced by community banks and provides recommendations for strengthening risk assessment processes. It suggests banks evaluate their initial risk assessments, loan review processes, portfolio management, and allowance for loan and lease losses (ALLL) methodology to ensure these areas will withstand regulatory scrutiny. Outside reviews can help banks optimize credit administration and prepare for their next exam.
This document summarizes a presentation made by CA Smita Rajpurkar on rating concepts and methodologies at CARE. It discusses CARE's key business lines of ratings for corporates, financial sectors, public finance and infrastructure. It then outlines CARE's rating process, key risk factors considered, and approach to ratings surveillance. The document also provides details on CARE's rating scale and committee, and concludes with highlights of key rating factors for construction, roads and real estate sectors.
Michael Rizzo has 19 years of experience in claims handling and investigations. He has held roles such as Senior Homeowner Adjuster, Senior Casualty Adjuster, Litigation/Casualty Supervisor, Auto Property Supervisor, and Litigation Specialist. He has a track record of managing teams, meeting quality and customer service metrics, and implementing process improvements. Rizzo has worked for several insurance companies including MetLife, Liberty Mutual, Sedgwick CMS, and Fireman's Fund. He holds a Bachelor's degree in Criminal Justice.
Commercial credit analysis can introduce a lot of complexities into the banking organization: additional underwriting standards, new financial data to collect and interpret, complex relationships with multiple entities and commingled incomes, additional regulatory focus, etc.
Sageworks Senior Consultant Peter Brown covers some of the basics that come with credit analysis including what data to consider, how to analyze the data, when to introduce benchmarking and automation and other topics.
S. Mark Brumbelow gave a presentation on succession planning basics. He outlined identifying key players in the succession process such as owners, executives, employees and advisors. Goals for transition include defining roles and developing candidates. Tax opportunities include gain deferral for sellers and eased cash flow for buyers through organizational structure. Challenges include valuation, structure impacts, and family dynamics. The presentation emphasized starting succession planning early, aligning it to the business, and developing an alliance network.
This summary provides an overview of Karen Rockoff's professional experience:
Karen Rockoff has over 20 years of experience in risk management and credit analysis. She most recently served as Chief Risk Officer at Peapack-Gladstone Bank from 2013 to 2016, where she created an enterprise risk management program and managed regulatory relationships. Prior to that, she spent 17 years at Morgan Stanley in various credit risk management roles, including leading coverage of a $4 billion healthcare client portfolio and managing new product credit approvals. She began her career as a Senior Credit Analyst at Nomura Securities International.
Commercial Real Estate Appraisal: How lenders can improve their CRE appraisal...Libby Bierman
Over the past 5 years the appraisal environment has seen many changes that have caused uncertainty and confusion. Despite the positive economic environment, the appraisal management and review process is still causing issues for financial institutions of all sizes. Sageworks has invited appraisal review and valuation management experts from MountainSeed to discuss the most common issues for lenders today.
Managing distressed private equity and credit investmentsSteven Rosenblum
Many family offices, pensions, endowments and other investors that have historically allocated capital to private equity and credit funds (“Investors”) are increasingly investing in transactions directly. To achieve similar returns, Investors must replicate the capabilities of institutional asset managers in sourcing opportunities, structuring transactions and investment oversight. When unexpected problems occur post-investment, Investors often lack the resources and internal expertise to optimally manage the position, especially in distressed situations. These include risk management practices to help prevent investments from becoming distressed, activist expertise to manage distressed situations and strategies to recover investments after they have become impaired. This article discusses best practices in each of these areas that help Investors maximize the value of problematic investments.
This document summarizes a presentation about preparing an ambulatory surgery center (ASC) for sale. The presenters discuss defining the ASC's goals and wants, performing a SWOT analysis, getting partner buy-in, assembling an advisory team, cleaning up finances, determining value drivers and competitive differentiators, addressing weaknesses and deal killers, handling underperforming physicians, and the stages of due diligence. The presentation provides ASC owners and administrators guidance on properly preparing their facility for a potential sale.
1. Credit ratings are evaluations of a debtor's ability to pay back debt and likelihood of default, determined by credit ratings agencies based on both public and private information.
2. Credit ratings are not based on formulas but on the judgment and experience of agency analysts in determining what information should be considered for a rating.
3. Poor credit ratings indicate a high risk of default based on the agency's analysis of the entity's history and long term economic prospects.
NewOak provides compliance management and regulatory consulting services to financial institutions. Their services help clients minimize compliance risks, improve customer satisfaction, obtain compliance assurance, and develop mitigation strategies. NewOak's suite of services includes policy and procedures reviews, vendor risk assessments, loan reviews, and remediation services. They have experience in areas like complaint management, monitoring, training, and independent audits. NewOak aims to help clients stay ahead of increasing regulatory challenges through customized compliance solutions.
This document provides an overview of credit ratings. It begins by defining credit ratings as evaluations of a debtor's ability to pay back debt and likelihood of default. Credit ratings are determined by credit rating agencies who analyze both public and private information. The document then discusses the different types of ratings including sovereign, short-term, and corporate credit ratings. It explains the credit rating methodology and process. Finally, the benefits and drawbacks of credit ratings for both investors and companies are outlined. The major credit rating agencies operating in India are also listed.
Credit analysis is a process used by banks and financial institutions to evaluate potential borrowers. It involves collecting information about the borrower's identity, finances, repayment ability, and integrity. The institution then analyzes the accuracy of the information and makes a decision. Key steps include information collection, verification, and assessing the borrower's character, capacity to repay, capital, business conditions, and available collateral through a 5 C's model. Proper loan documentation and pricing are also important parts of the process.
Parker, Smith & Feek is an insurance consulting firm that provides audit services to assess clients' risk management programs and insurance coverage. Through their audit process, they comprehensively review clients' existing insurance policies, contracts, claims history, loss prevention programs, and more. They then provide recommendations to ensure clients have a well-structured insurance program that covers all necessary exposures and offers cost savings opportunities through improved risk management. The audit process is designed to be non-disruptive for clients and helps identify coverage gaps, unnecessary costs, and other areas for enhanced protection or savings.
The document discusses credit ratings and CRISIL's rating methodology. It provides 3 key points:
1) Credit ratings provide an independent assessment of a company's ability to meet its financial obligations and are used by investors to evaluate risk. Ratings benefit both issuers by improving marketability and investors by supplementing their analysis.
2) CRISIL's rating methodology involves analyzing industry risk, business risk factors like competitive position, and financial risk factors like profitability and cash flows. Management quality is also assessed.
3) The ratings process involves a rating agreement, meetings with management, a rating committee review, communication to the issuer, and public dissemination.
credit rating process in India in details .pptxSudhamathi4
Credit Rating - Meaning
A credit rating is an independent assessment of a company's or government entity's creditworthiness in general terms or with respect to a particular debt or financial obligation
Credit Rating - Meaning
Credit rating is an opinion of the relative capacity of a borrowing entity to service its debt obligations within a specified time period and with particular reference to the debt instrument being rated.
History of Credit Rating
The credit rating system originated in the United states in the 70’s.
The high level of default, which occurred after the great depression, in the U.S. Capital markets, gave the impetus for the growth of credit rating.
The default of $82 million of commercial paper by Penn central in the year 1970, and the consequent panic of investors in commercial papers, resulted in massive defaults and liquidity crisis.
This prompted the capital issuers to get their commercial paper programs rated by independent credit rating agencies.
Importance of Credit Rating
Credit rating helps in the development of financial markets.
Credit rating enables investors to draw up the credit–risk profile and assess the adequacy or otherwise of the risk–premium offered by the market.
It saves the investors, time and enables them to take a quick decision.
Issuers have a wider access to capital along with better pricing.
It acts as a marketing tool for the instrument, enhances the company’s reputation and recognition.
Credit rating is a tool in the hands of financial intermediaries.
Credit rating helps the market regulators in promoting stability and efficiency in the securities market.
Credit Rating Process
Credit Rating Process
Features of Credit Rating
Specificity
The rating is specific to the debt instrument
It is intended as a grade and an analysis of the credit risk associated with that particular instrument.
Relativity
The rating is based on the relative capability and willingness of the issuer of the instrument to service debt obligations in accordance with the terms of the contract
Guidance
The rating aims at furnishing guidance to investors/ creditors in determining a credit risk associated with a debt instrument/ credit obligation.
Not a Recommendation
The rating does not provide any sort of recommendation to buy, hold or sell an instrument since it does not take into consideration, factors such as market prices, personal risk preferences and other considerations which may influence an investment decisions.
Broad Parameters
The rating process is based on certain broad parameters of information supplied by the issuer, and also collected from various other sources, including personal interactions with various entities.
No guarantee
The rating furnished by the agency does not provide any guarantee for the completeness or accuracy of the information on which rating is based.
Quantitative and Qualitative
While determining the rating grade, both quantitative as well as qualitative factors are employed.
Advantages
Advantages
Black Swan's investment due diligence process is completely independent. We are focused on the needs of fiduciaries to guard against fraud and conflicts of interest.
We believe in the inherent benefits of understanding manager performance. The goal of our process is to identify and validate sound investment programs. In a dynamic environment, it is critical to analyze and understand investment style as well as risk management procedures.
Mercer Capital | Financial Sponsors QualificationsMercer Capital
Mercer Capital provides various financial advisory services for financial sponsors, including solvency opinions, fairness opinions, portfolio valuations, purchase price allocations, goodwill impairment testing, and equity compensation valuations. They have extensive experience working with private equity firms, businesses, lenders, and auditors on middle market transactions. Their services help sponsors minimize risk and maximize value in their investments.
This document discusses the role of credit rating agencies in corporate governance. It defines what a credit rating is and explains that credit rating agencies rate debt instruments issued by companies to provide credibility. They help investors make informed decisions and help companies raise capital at lower costs. The document also outlines the rating process, methodologies, role of credit rating agencies for investors and issuers, and the regulatory framework for credit rating agencies in India under RBI and SEBI regulations. It concludes that regulations have ensured credible players but recommends strengthening oversight of credit rating agencies.
Final investor roadshow deck 6_24_2015_pm editioninvestorjgwpt
The document discusses The J.G. Wentworth Company becoming a diversified consumer financial services company by expanding its product offerings. It currently purchases structured settlement and annuity payments and plans to enter personal lending, prepaid cards, and mortgage lending. It leverages capabilities in marketing, underwriting, and funding to efficiently expand into new areas while limiting credit risk. The company aims to use data and digital tools to enhance customer insights and better manage the business as it diversifies its revenue sources.
Moody's provides credit ratings that represent their opinion of an issuer's creditworthiness or likelihood of default. Ratings are determined through a committee process involving meetings with management, financial analysis, and consideration of public and confidential information. Ratings are assigned on long-term and short-term scales, ranging from Aaa (highest credit quality) to C (lowest rating, typically in default). Moody's monitors rated issuers on an ongoing basis and may change ratings over time based on new information. The purpose is to provide investors a simple system for comparing the future relative creditworthiness of different securities.
PwC Publication: TRID industry landscape 042216Tom Gere
PwC continues to provide client guidance to integrate TRID process and procedures. Happy to Discuss.
Tom Gere, Managing Director, PwC Thomas.gere@pwc.com
The document discusses trends in the mortgage industry following the implementation of the TILA-RESPA Integrated Disclosure (TRID) rule. It finds that while implementations were imperfect, with many lenders still working to achieve full compliance, the cost of ongoing compliance is significant. It also reports inconsistent approaches across lenders have led to uncertainty and challenges. For the secondary market, high error rates found in loan reviews have increased repurchase risk and costs. Retail lenders also face challenges from ineffective fee management and the need to enhance processes to reduce costs and improve compliance.
The document discusses credit ratings, which evaluate the creditworthiness of debtors like businesses and governments. Credit rating agencies determine ratings based on qualitative and quantitative analysis of financial information. Ratings are used by bond investors to assess the likelihood of default, and are indicated by symbols rather than mathematical formulas. A poor credit rating suggests a high risk of default. The document also outlines the benefits of credit ratings for both investors and companies.
This document summarizes EY's captive insurance services. It discusses how EY can help clients navigate risks through identifying business risks across an organization, assessing risk transfer options like a captive insurance company, and allowing more effective risk control. EY provides services including advisory, actuarial, tax, risk management, and compliance services to establish and manage captive insurance arrangements. The goal is to provide options to improve cash flow, reduce expenses, increase returns, and make informed decisions on alternative risk transfers.
Lenders Compliance Group is a full-service mortgage risk management firm specializing exclusively in outsourced mortgage compliance services for banks and non-banks. It offers a comprehensive suite of mortgage compliance services including audits, reviews, analytics, training, licensing assistance, and default management. Lenders Compliance Group aims to help clients achieve and maintain compliance with various federal, state, and investor regulations and standards.
Sanjay Kumar Jain has over 10 years of experience working in compliance roles for financial institutions. He currently works as a Senior Compliance Associate for Sesame India Pvt Ltd, assisting financial advisors in maintaining quality service and ensuring compliance with all regulations. His responsibilities include assessing client files for accuracy and regulatory compliance, performing reviews of documentation, and identifying any issues related to anti-money laundering or politically exposed persons. Previously he has worked for Sun Life Financial and Sesame India Pvt Ltd in other compliance associate roles focused on monitoring advice processes and transactions for regulatory compliance. He holds professional qualifications in mortgage advice, financial products, and has received recognition as a star performer and most valuable performer.
A credit rating is an evaluation of a debtor's creditworthiness and ability to repay debt conducted by a credit rating agency. It is based on the debtor's credit history, current financial position, and likely future earnings. Credit ratings help investors assess risk and return when making investment decisions. The major credit rating agencies in India are CRISIL, ICRA, and CARE. They provide ratings for various instruments including corporate bonds and government debt.
The document provides information on credit ratings. It begins by defining credit and explaining what a credit rating is. A credit rating evaluates a debtor's ability to repay debt and the likelihood of default. It is determined by credit rating agencies based on both public and private information. The document then discusses the different types of ratings including sovereign, short term, and corporate credit ratings. It provides details on the rating scales and categories used by major agencies. The benefits of credit ratings for both investors and companies are outlined. Finally, it discusses some leading credit rating agencies globally and domestically in India.
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2. Cushman & Wakefield
Mr. Ping has a distinctive background which provides clients with an advantage over many of their competitors. He has
been actively involved in the real estate valuation and consulting profession since 1983 with employers in the banking
and public accounting arenas. His extensive experience in real estate ranges from the valuation of single assets to entire
bank loan portfolios.
In 2012, he joined Cushman & Wakefield and is currently serving as National Director of the Alternative Valuation
Services Group of Valuation & Advisory for Cushman & Wakefield Global Services, Inc. In this role he is responsible for
new business generation, supplying platforms, processes, and procedures, and quality control for the reviews for various
appraisals and evaluations.
In the 17 years prior to joining Cushman & Wakefield, he served as Chief Appraiser at PNC Bank and Huntington Bank.
Mr. Ping has experience and knowledge of the regulatory environment associated with valuation issues and with
underwriting policies and procedures. He continues to enjoy a very integrated relationship with the regulatory agencies.
Paul E. Ping, MAI
National Director
Alternative Valuation Services
The Lower-Cost Response to Regulatory Exemptions
Evaluation Solutions
3. Cushman & Wakefield
1. All transactions in which the “transaction value” is $250,000 or less
2. Real estate-secured business loans with a transaction value of $1,000,000 or less
and when the sale of, rental income derived from real estate is not the primary
source of repayment for the loan; and
3. Renewals, refinances, or other transactions involving existing extensions of credit.
a. There has been no obvious and material change in market conditions or physical aspects
of the property that threaten the adequacy of the institution’s real estate collateral
protection after the transaction, even with the advancement of new monies; or
b. There is no advancement of new monies other than funds necessary to cover reasonable
closing costs.
Regulatory Basis for Evaluations
When are Evaluations an option?
There are at least three acceptable scenarios for using an Evaluation
4. Cushman & Wakefield
Key Definition from the Agencies’ Appraisal Regulations
Transaction Value
• For loans or other extensions of credit, the
amount of the loan or extension of credit;
• For sales, leases, purchases, and investments
in or exchanges of real property, the market
value of the real property interest involved; and
• For the pooling of loans or interests in real
property for resale or purchase, the amount of
the loan or market value of the real property
calculated with respect to each such loan or
interest in real property.
For purposes of this definition, the transaction
value for loans that permit negative amortization
should be the institution’s total committed amount,
including any potential negative amortization.
5. Cushman & Wakefield
Appraisal or Not…
Evaluation: A valuation permitted by the Agencies’ appraisal
regulations for transactions that qualify for the appraisal
threshold exemption, business loan exemption, or subsequent
transaction exemption.
That should clear up any confusion!
Seriously, the subtlety of the definition is important. The word valuation versus the
word appraisal is key.
An Evaluation is not necessarily an Appraisal…
but an Appraisal can be an Evaluation as an Appraisal is a valuation.
What is an Evaluation?
6. Cushman & Wakefield
Appraisal or Not…
From a regulatory perspective, an Evaluation is not required to
be completed by an appraiser; however, in some states
Evaluations are encompassed in the state licensing laws and
requires the use of an appraiser.
In the agency guidelines,
• The person selected possesses the requisite education, expertise, and
experience to competently complete the assignment, and
• Persons who perform evaluations should possess the appropriate appraisal or
collateral valuation education, expertise, and experience relevant to the type of
property being valued. Such persons may include appraisers, real estate lending
professionals, agricultural extension agents, or foresters.
• The person is unbiased, independent and has no direct, indirect, or prospective
interest, financial or otherwise, in the property or the transaction.
What is an Evaluation?
7. Cushman & Wakefield
Is it more simple to order appraisals?
Evaluations typically cost less in terms of money and time
than appraisals. If not, you may be ordering appraisals
from the wrong people.
The agencies are enamored by a risk-based decision-
making approach. Every institution operates in different
types of markets, have different portfolio dynamics, and
have credit cultures.
Take advantage of where the regulations allow an
institution to be cost effective.
Why Use Evaluations?
8. Cushman & Wakefield
When to be careful
• Loans with combined loan-to-value ratios in excess of the supervisory loan-to-
value limits;
• Atypical properties;
• Properties outside the institution’s traditional lending market;
• Transactions involving existing extensions of credit with significant risk to the
institution; or
• Borrowers with high risk characteristics
Why Use Evaluations?
These risk factors can be minimized when ordering an Evaluation
from a qualified individual with the requisite experience.
9. Cushman & Wakefield
Why have a different process/procedure?
The Need for an Evaluation Program
Simply put…
Cost Reduction and Speed of Execution
• Make your customer’s happier
• Reduce your administrative burden, thus
internal costs
• Address safety and soundness
• Differentiate between risk parameters
10. Cushman & Wakefield
Why Choose Us?
The Cushman & Wakefield Experience
We know there are others that provide Evaluation
reports, but Cushman & Wakefield differentiates
our services and product from the industry.
• Reviewable Restricted Appraisal Report on “steroids”
• Fully customized report, not a checkbox form
• Completed by a full-time, state licensed
Cushman & Wakefield employee in the area
of the property
• Draw upon our extensive brokerage and
leasing network
• Process managed by experienced
personnel with bank valuation
oversight history
11. The Lower-Cost Response to Regulatory Exemptions
Cushman & Wakefield Evaluations
Let’s open this up for Q&A
Evaluations are exemptions to FIRREA’s appraisal requirements and are used to fulfill the requirements for loans meeting the de minimis thresholds.
Interesting concept is the definition of de minimis
Webster defines this as:
lacking significance or importance : so minor as to merit disregard
What this tells us is that the real estate in question is not the source of repayment is really ancillary in the decision to extend credit.
Typically we talk about owner occupied real estate wherein the bank also has a loan on the operations of the owner and are looking at the source of repayment from the cash flow of the business operations. The real estate would only come into play when there is a foreclosure scenario.
As banks do not go into a loan assuming foreclosure, the real estate is a secondary or tertiary source of repayment
The important thing to understand is that the transaction value is not the property value, but rather the loan amount.
The distinguishing characteristic is that the loans should be “stand-alone”. Individual loans to borrowers may need to be aggregated to determine transaction value.
The agencies do not give us a really good idea of what an Evaluation is but rather make a key differentiation by not using the word “appraisal”.
The December 2010 Interagency document tells us what should be in an Evaluation, but not the form in which the report should be presented.
Another important aspect is that we are told Evaluations are not required to be completed by appraisers.
Only someone with the requisite education, expertise and experience.
Appraisers can complete Evaluations as long as they follow the USPAP guidelines.
In order to accomplish this the Evaluation must be completed in either a Restricted appraisal report or an Appraisal report.
Look back at the concept of the definition of de minimis.
Look at the risk of the transaction as a function of how it fits into the bank’s credit requirements, culture and portfolio. RISK is key to the agencies philosophy regarding most transactions and the due diligence that is required.
There are instances when the agencies tell us that Evaluations may not be the best product to use.
However, even these situations may be overcome by using a competent source for the Evaluation.
For example:
A golf course is considered by many to be a unique property.
If you were to use a leading industry golf course specialist to complete the Evaluation, the risk may be mitigated.
The agencies explain that a program should be documented and a process/procedure put in place for the entire valuation function.
An Evaluation is a component of the valuation function and thus you should have a procedure in place to utilize Evaluations correctly.
Cushman & Wakefield is uniquely qualified to complete Evaluations. We use of existing employees (state licensed/certified appraisers) familiar with the local markets to complete Evaluations.
Following USPAP we use the format of a restricted appraisal report to fulfill the Evaluation requirements. The key difference between our product and others is that our restricted appraisal report is more in-depth and provides the bank with the information necessary to review and understand the logic used by the appraiser.
Most all the competitors use a form driven, check box approach by independent contractors throughout the country. They may not even have a state license or certification.
Of note: the Appraisal Institute recently had a seminar on how appraisers can provide Evaluations to banks…..REALLY? We have been providing this product for over 5 years and the appraisers are just now understanding this?
I came to this firm with the intent to create this product and provide to institutions what is really been missing. In all my years of banking, Evaluations were a source of irritation. There was never a credible source for acquiring Evaluations from external sources.
Internally prepared? Many banks have internal departments to handle this but the cost of production of a variably demanded product with fixed costs can be detrimental to a cost effective program.