Credit Risk Modeling

Build practical credit risk modeling skills and learn how financial institutions evaluate and manage borrower risk. Designed for aspiring risk analysts, finance professionals, banking practitioners, and advanced finance students, this course develops your understanding of Probability of Default (PD), Loss Given Default (LGD), Expected Loss (EL), and structural and reduced-form credit risk models. You’ll apply the Altman Z-Score to assess bankruptcy risk, interpret credit ratings and evaluation metrics, and examine airline industry cases to identify credit signals and evaluate financial health. You’ll also analyze financial statements, working capital needs, and unhedged foreign currency exposure (UFCE), then use these insights to assess borrower exposure and determine appropriate credit structures. As you progress, you’ll explore internal rating systems, red-flag indicators, parent support structures, and lender “ways out” strategies. By the end, you’ll be able to compare credit models, evaluate corporate creditworthiness, and construct an internal risk assessment framework. The course’s structured progression—from foundational models and numerical examples to industry cases and institutional lending practices—helps you connect financial analysis with evidence-based credit decisions. Enroll to strengthen your ability to assess credit risk using established, industry-relevant techniques.