Overview

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Build a strong foundation in credit risk modeling by learning how financial institutions analyze, evaluate, and manage credit risk. This course guides you through essential credit risk concepts, including Probability of Default (PD), Loss Given Default (LGD), Expected Loss (EL), structural credit risk models, and market-based approaches to credit assessment. You will apply Altman Z-score techniques to evaluate bankruptcy risk, interpret credit ratings and evaluation metrics, and analyze real-world airline industry case studies to understand how credit decisions are made in practice. As you progress, you will explore working capital modeling, unhedged foreign currency exposure (UFCE), financial statement analysis, internal rating systems, and lender "ways out" strategies used in institutional lending. Designed for aspiring risk analysts, finance professionals, banking practitioners, and advanced finance students, this course combines conceptual understanding with practical applications to help you assess borrower risk using established credit assessment techniques. What makes this course unique is its progression from core credit risk models to real-world industry applications and internal credit evaluation practices, enabling you to connect financial analysis with structured credit decision-making. Whether you want to strengthen your knowledge of credit risk analysis, improve your understanding of credit modeling, or build practical skills in financial risk assessment, this course provides a structured learning path grounded in industry-relevant methodologies.

Syllabus

Foundations of Credit Risk Modeling

This module introduces the essential principles of credit risk, exploring the fundamental models used to measure and manage credit exposure. It covers key parameters such as probability of default, loss given default, and the development of structural credit models through practical numerical insights.

Scoring Techniques and Industry Applications

This module explores scoring systems like credit ratings and Altman Z-scores, emphasizing their application in evaluating bankruptcy risks. It also analyzes real-world case studies from the airline industry to interpret credit signals and assess financial health using evaluation metrics.

Financial Analysis and Internal Rating Practices

This module dives into advanced credit assessment tools including working capital modeling, unhedged currency exposure, and internal rating systems. It emphasizes spreadsheet-based analysis and alternative repayment options (ways out) to reinforce institutional lending practices.