Bond Market Credit Risk:
Protecting the Investor

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.


This course has been designed to suit anyone involved in fixed income – from sales to origination, and from trading to operational support, critically:
• Traders, 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

Learning Outcomes

By the end of the programme delegates will be able to:
– Explain the ways in which a fixed income instrument can be structured effectively to protect the investor
– Critically evaluate the types of covenant that might typically be found in a fixed income instrument
– Explain how secured bonds, (if collateralised by fixed assets) can provide for a better recovery for a bond in distress

Course Content

– The three ‘threads’ of investor protection: collateral, covenants and subordination
– Analysing Covenants:
— Maintenance covenants
— Incurrence covenants
– Examples: How to spot potential covenant deficiencies
– Collateral:
— how often do we see fixed income instruments with security packages?
— Types of collateral – the advantages & disadvantages
— Taking security and analysing priority under Absolute Priority Rule
-Collateral and debt recovery rates
– Understanding key legal terms


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We are thought leaders in instructional and learning journey design and holistic solution architects. We have extensive finance and investments experience combined with skills application to deliver performance improving results. We develop immersive learning environments that maximize time to productivity, support talent retention and added value to improving quality of hires.

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We are focused on mining the embedded organisational intellectual capital for the benefit of the next generation. We create and curate best in class practice gathered from our experience with the leading financial institutions. We design our programmes with the end in mind – what results are you trying to achieve with this intervention? What metrics will we set ourselves to achieve that?

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