Assessing Credit Risk of Corporate Bonds - Livestreamed
New dates TBC - e-mail to register your interest




This course is available on request. Contact us as at to find out how we can deliver this training.

Whilst fixed income continues to be one of the most dominant asset classes for issuers and investors, often the analysis of the credit risk associated with the instrument remains limited to a simple review of the instrument’s credit rating.

This course seeks to address this issue – reviewing not just the credit risk profile of the issuer, but also the structural features of this instrument that can make an investor’s position either weak or strong.

Learning Objectives

By the end of the programme delegates will be able to:

  • Undertake a credit risk assessment of a typical corporate fixed income issuer – from a qualitative perspective
  • Review and opine on the quality & strength of the issuer’s key credit metrics
  • Explain the ways in which a fixed income instrument can be structured effectively to protect the investor
  • Provide an overview of the types of covenant that might typically be found in a fixed income instrument
  • Explain how collateral, if provided by the issuer can provide for a better recovery for a bond in distress
  • Describe how a bond can become structurally subordinated and how this structural subordination might be defeated
  • Illustrate the ratings process for a first-time issuer in the bond markets
  • Review and provide a commentary on bond default and transition rates across the ratings spectrum
Describe the types of market participants and appreciate why these firms engage in SLB, and their impact on capital markets and retail investors
Understand the operational, legal and regulatory risks and issues involved 
Comprehend the advantages/disadvantages of using different types of collateral 
Appreciate the impact that corporate actions have on the lent security and on securities collateral
Discover some relevant anecdotes and SLB case studies

Who should attend?

This course has been designed to suit anyone involved in fixed income – from sales to origination, and from trading to operational support, critically:
  • Asset managers & Bond Sales staff seeking to improve their knowledge of fixed income from the credit perspective
  • Infrastructure staff seeking to gain a better understanding of the fixed income product beyond pricing & yield curves

Certification and Programme Recognition

This course is certified by ICMA and the ICMA Centre, Henley Business School, University of Reading.

ICMA recommends that 20 learning hours can be associated with this course, based on attended/undertaken hours of study required to successfully complete the learning outcomes.

A Certificate of Attendance will be awarded to those who meet the minimum attendance requirements for this course.

ICMA is a member of the CPD® Certification Service and approved by the Securities & Futures Commission of Hong Kong as provider of Continuous Professional Training (CPT).

Please note that your course certificate of attendance or completion should be sufficient to satisfy any professional development requirements – if you require further evidence, please contact us at

Course Trainer

Yolanda Clatworthy

Days 1 & 2: Credit Risk

  • How does credit risk arise in fixed income?
  • Evaluating qualitative vs. quantitative risks presented by a typical corporate issuer
  • Qualitative risk: a review of the key approaches and methodologies
  • Quantitative risk: a review of the key credit metrics:
    • A focused approach to balance sheet and income statement evaluation
    • Understanding the essence of corporate cash flow analysis
    • Using financial metrics (ratios) to evaluate the credit risk of a corporate – from profitability to liquidity, from efficiency to solvency and more
  • An overview of the rating agency approach to credit analysis; how corporate credit ratings are derived and assigned

Day 3: Protecting the Investor

  • The three ‘threads’ of investor protection: collateral, covenants and subordination
  • Understanding the world of covenants: Maintenance vs. Incurrence covenants
  • Examples; How to spot potential covenant deficiencies
  • A comparison of debt products and the levels of investor protection that they afford
  • Collateral: how often do we see fixed income instruments with security packages?
  • Types of collateral – the advantages & disadvantages
  • Collateral and debt recovery rates
  • The hazards of taking collateral

Day 4: Protecting the Investor (continued)

  • Subordination – defining contractual, structural and cash flow-based subordination
  • How structural subordination can arise in a variety of corporate structures
  • Defeating structural subordination
  • The fixed income instrument in distress
    • Understanding the drivers of fixed income defaults, investment grade vs. high yield instruments
    • A review of historic transition and default rates – globally and by industry sector
Securities Lending & Borrowing (SLB) – The Fundamentals 
What is Securities Lending?
The Purpose: Why Do Lenders Lend & Borrowers Borrow?
Participants & Structure
Trading Strategies
SLB Trade Lifecycle - An Overview
Short Selling, Naked Short Selling
Locates, Trade Execution & Fails
Corporate Events
The Marketplace – Participants & Stakeholders
Lenders, Borrowers and Intermediaries 
The Lender’s Perspective: Motivations and Considerations
The Borrower’s Perspective: Motivations and Considerations
Global custodians
Third-party lending agents
Central counterparties
SLB Trade Lifecycle
Pre-trading, Locates
Trade execution
Mark to Market 
Margin calls
Recall/return of lent settlements
Fees & Billing
Assets & Collateral
Equity vs Fixed Income 
Fundamental collateral concepts
Margin: Purpose & use 
Types of collateral
Legal Documentation
Securities lending agency agreement
Updating Books & Records
Securities bookkeeping: Definition & purpose
Importance of updating books & records
Updating books and records for lent/borrowed securities, cash and non-cash collateral, fees and rebates
SLB and Corporate Actions
Corporate actions: Overview 
*Cash dividends
*Lent securities
*Short sale proceeds
*Lent/borrowed equity
Withholding tax
Risks in Securities Lending & Borrowing 
Market Risk
Credit Risk
Operational Risk
Legal Risk
Reputational Risk 
EU short selling & financial transactions tax
Reporting to a central trade repository
Recent SLB Scandals & Controversies
The Lehman saga uncover

Livestreamed Course

ICMA courses are delivered via video conferencing accessed on our digital learning platform, using the most effective pedagogical approaches and incorporating interactive functions like virtual breakout rooms.

The Assessing the Credit Risk of Corporate Bonds live sessions are delivered in four 3.5 hour sessions over the course of two weeks. You will be given access to the course materials before the live sessions, and will have access to those for a total of three months from the first live session. During these three months you will have the option to keep working through the course materials at your own pace.

Next datesTBC
Register your interest for this course at

Livestreamed course fees

Members: EUR 1,850 + VAT (if applicable)
Non-members: EUR 2,390 + VAT (if applicable)

For security reasons, delegates who have not registered in advance will not be admitted to the live sessions.

Please note:

  • All payments must be made in Euro.


Should you have any queries, please contact

Test your knowledge

Please complete the fields below to get your quiz results

*mandatory fields

Mailing List*

Terms and conditions*

I agree that ICMA may retain the information supplied on this form on a database and use it for the purpose of administration only when applicable. 

Privacy, data and cookiesSubscribe/Update your preferences

Please tick here to agree to the terms and conditions
I agree to the above terms and conditions
Follow ICMA Education:

ICMA Zurich
T: +41 44 363 4222
Dreikönigstrasse 8
8002 Zurich

ICMA London
T: +44 20 7213 0310
110 Cannon Street
London EC4N 6EU
ICMA Paris
T: +33 1 8375 6613
25 rue du Quatre Septembre
75002 Paris

ICMA Brussels
T: +32 2 801 13 88
Avenue des Arts 56
1000 Brussels
ICMA Hong Kong
T: +852 2531 6592
Unit 3603, Tower 2
Lippo Centre
89 Queensway, Admiralty
Hong Kong (general enquiries) (education enquiries) (sustainable finance)
Copyright © 2024 International Capital Market Association.