Products to Hedge Interest Rate Risk
December 07, 2006
Course Overview
Understanding Your Middle Market Customer: Products to Hedge Interest Rate
Risk is a course for experienced financial professionals who need an
introduction to the financial services relevant to businesses in the
middle and large corporate market. This one-day course focuses on how
different types of interest rate risk management products (such as
interest rate swaps, caps, and collars) work, and how these products and
techniques can protect borrowers from interest rate risk. In addition, you
will examine the credit, market, and operational risk elements of such
products.
Who will benefit?
Credit analysts and relationship managers with three to five or more years
of experience or a solid grounding in commercial credit financial
analysis. Participants should also have exposure to the relationship
management of commercial customers. These individuals will either serve
middle market entities in a relationship context (typically defined for
these purposes as companies with revenues between $20 million and $500
million) and select corporate situations, or work in a large community
bank that has customers with relatively complicated structures.
Participants might not have "middle market" customer responsibilities as
defined above, but they could have customers experiencing similar
situations (for example, the sale of a business, which would require
knowledge of corporate valuation).
You will:
- Learn how to define and explain the mechanics,
features, benefits, and credit risk implications of various interest
rate management products, such as swaps, caps, collars, and private
placements.
- Find out how to calculate effective annual interest
cost to establish the comparable equivalent of alternative rate
structures.
- Learn the "ins and outs" of practical corporate
finance pricing and cash flow computations.
- Find out ways to apply pricing techniques to
understand and assist in financial decision-making from the perspective
of the corporate treasurer.
Prerequisites
You are expected to have a fundamental understanding of credit risk
analysis and transaction structuring, including financial accounting,
financial statement analysis, and loan structuring.
Use of Financial Calculators
You need to have well-established skills using a Hewlett-Packard financial
calculator and the ability to perform routine calculations such as present
value, net present value, and internal rate of return. These skills are
necessary for you to follow class instruction and to complete case
assignments.
Pre-course Assignment
This course requires you to complete a pre-course assignment of
approximately one to two hours.
RMA Members: $425
Nonmembers: $650
Register online at
http://www.rmahq.org or by calling 800-677-7621. Refer to
product number 3203027.
