Corporate Credit Risk: Modelling and Stress Testing a Corporate Credit Risk Model

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The “Corporate Credit Risk” course extend the focus of analysis to large enterprises with complex capital structures and multi divisional operations.

Participants will be able to analyse and apply corporate credit rating methodologies using qualitative and quantitate approaches to estimate credit ratings for debt issuance or syndicated lending.

Participants will gain an in depth knowledge of cash flow analysis, debt seniority and subordination, a strong emphasis is placed on the identification and consistent analysis of sustainable and recurring cash flows using reported financial statements.


This is a foundation course for graduate entrants with a basic knowledge of accounting and financial model building.

Learning Outcomes

At the end of this course, participants will be able to:

  • Apply a rating agency ratings qualitative analysis methodology to a constructed Corporate Credit Risk Model
  • Calculate rating agency-defined measures of cash flow and interest coverage
  • Calculate metrics for liquidity, solvency and net worth
  • Analyse and build covenant compliance checkers with regard to debt seniority and subordination

Course Content

  • A review of forecasting best practices
  • Best practices for modelling sensitivities
  • Best practices for debt amortisation
  • Adjusting reported financial data for rating purposes including:
    • Leased assets
    • Off balance sheet finance
    • Payables securitisation
    • Exceptional items
    • Goodwill and intangible assets
    • Cost capitalisation
    • Unfunded healthcare or pension liabilities
    • Common pitfalls and how to avoid them
    • Building bespoke credit metric add-ons
    • Financial ratios
    • Covenant checkers
    • Valuation metrics


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The team are so friendly and pleasant to work with, everyone is very professional and keen to help us. Building a relationship over the past couple of years helps us to feel like the Alpha team are even more able to understand our needs and provide more proactive solutions.
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