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1
Part 3Payment Risk
Assessment & Management
in the 21st Century Ron Wells
International Trading Pte Ltd
Singapore
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AGENDA
2
• Payment Risk Assessment• Payment Risk Mitigation• Receivable Portfolio Management
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Credit Risk consists of two main elements;
namely Performance Risk
and Payment Risk.
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Credit Risk cannot be eliminated it can only be either retained or changed into another type of risk; a class of
risk judged to be easier to bear safely.
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REPUTATION RISK
PRICE OR MARKET
RISK
CREDIT RISK
OPERATIONAL RISK
COLLATERAL RISK
RISK
TRA
NSFER
RIS
K T
RA
NSF
ER
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People and the Future
6
Organisations would love to mechanise credit risk assessment. Those that take the alternative approach will always have a sustainable competitive advantage,
and will likely out-survive the former.
PD x EAD x LGD = EL takes no account of people or the unknowns of the future.
Relationships that are strong, transactions that are win-win in concept, and in-depth knowledge and understanding of counterparties; these are the foundations of long term business success.
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Basel II Credit Risk
PD
EAD
LGD
X
X
Probability of Default (PD)
Exposure at Default (PFE)
Loss Given Default (LGD)
= EL
Expected Loss
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Why do companies fail?
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Incompetentor
Dishonest MANAGEMENT
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• Being out of touch with reality• Large technical knowledge but poor
commercial control• Great talents in salesmanship• Strong-willed• Sumptuous living and unreasonable
withdrawals of cash from the business• Excessive risk-taking
Common Attributes of Failing Management
von Stein and Ziegler 1984
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AGENDA
11
• Payment Risk Assessment• Payment Risk Mitigation• Receivable Portfolio Management
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GRANTING POST DELIVERY CREDIT IS AN INVESTMENT DECISION
A decision to grant Credit should be the result of a strategic assessment intended to assure competitive advantage accrues to the firm.
Trade Credit should not simply be an incidental outcome of the sales process, a company must
have a sound reason to grant credit.
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REASONS TO GRANT CREDIT
• Product Enhancement• Comparative Cost of Money• Administrative Efficiency• Building Trust• Business Development
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B2B CREDIT MANAGEMENT IS A SERIOUS GAME OF
‘WHO CONTROLS THE CASH’ In order to win the competition with customers
for control of the cash after delivery;Means, Motive and Opportunity to pay are
the three fundamental ideas a corporate credit manager needs to understand.
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DUE DILIGENCEThe first priority before accepting any new customer (foreign or domestic) must be to
ascertain whether it is a genuine business. The full and correct name of the potential buyer, its
registered and main trading address(es) and the names of the owners or active executives must
be established.
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Means, Motivation and Opportunity to Pay = M2O
• The means to pay when the invoice is due• The motivation to pay when the invoice is
due• The opportunity to pay when the invoice
is due
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Means to Pay• Financial Analysis– Sustainable Cash Flow & Cash Cycle– What is hidden or not stated?
• Strategic Analysis– Management Quality– Business Model– Competitive Position– Customer/Supplier Quality & Concentration– Parent or Associate Support
17
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http://www.barrettwells.com/BWcr%20ACT%20ConfFeb07.pdf
More information about the calculation of Sustainable Cash Flow and Forensic Cash Flow Analysis is available in a presentation found via the link below:
Page 17
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Cash Flow Cycle Magic
No Need for a Magic Potion
No Need to be a Magician
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The magical Cash Flow Cycle is described as magical because of the way it magically causes cash to disappear.
Left uncontrolled itwill suck in cash
and lock it beyondreach; particularly in
times of risingprices or increasing
sales volumes.
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The ‘cash flow cycle’ is the time required to convert goods into cash; from the date the company pays the costs of acquisition of the goods to the date of receipt of the
cash from related sales.
DAYS PAYABLES DSO
DAYS INVENTORY
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The FormulaCash Flow Cycle
= (Days Inventory + Days Sales Outstanding) – Days Payables
Days Inventory = Inventory / (Cost of Sales / 365)Days Sales Outstanding = Trade Receivables / (Sales / 365)
Days Payables = Trade Accounts Payable / (Cost of Sales / 365)
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An Example - CorusOver the period 2002 through 2004, Corus Group Plc evidenced a
cash flow cycle of between 64 and 66 days. Hence in 2004 as its sales grew by £1.38 billion, the extra cash that
became locked up in its Cash Flow Cycle grew by £250 million. This represents some 18% of the sales growth.
In other words, for every £5 of additional sales Corus locked away almost £1 in additional working capital.
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Corus 2005COST OF SALES /
DAY $24mio
PAYABLE DAYS 78
INVENTORY DAYS 82
RECEIVABLE DAYS[ DSO ] 54
CASH CYCLE DAYS 58
WORKING CAPITAL $ MIO 1,392
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Some ‘What If?’ IllustrationsCOST OF SALES /
DAY
PAYABLE DAYS
INVENTORY DAYS
RECEIVABLE DAYS
[ DSO ]
CASH CYCLE DAYS
WORKING CAPITAL
$ MIO$24mio 78 82 54 58 1,392
78 70 54 46 1,104(288)
78 82 40 44 1,056(336)
90 82 54 46 1,104(288)
90 70 40 20 480(912)
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Growth in sales is extremely cash hungry in every
business; unless the components of
the Cash Flow Cycle are carefully
controlled.
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How Much Credit?Camilo Gomez PhD
Business CreditMarch 2007
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Credit Limit Model
28
Double, double toil and trouble; Fire burn, and caldron bubble. Fillet of a fenny snake, In the caldron boil and bake; Eye of newt, and toe of frog ...
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EXAMPLE CREDIT LIMIT PARADIGM
• Limit not to exceed 10% of equity amount (shareholders' own funds) of own company.
• Limit must not exceed the requested amount, bearing in mind the customer's normal purchasing pattern.
• Limit not to exceed customer's assessed ability to pay trade related obligations, in the normal course of business, within normal terms. Example formula: (company’s annual cost of the goods) * ((1/(the Risk Score))*0.05. Thus scaling down a limit as the score indicates higher risk.
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EXAMPLE CREDIT LIMIT PARADIGM
• Limit not to exceed 10% of equity amount (shareholders' own funds) of own company.
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EXAMPLE CREDIT LIMIT PARADIGM
• Limit must not exceed the requested amount, bearing in mind the customer's normal purchasing pattern.
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PAYMENT TERMS & LIMITS
32
Minimum Order QuantityBuyer’s Customers’ Payment Terms
Average Quantity Sold Daily by the BuyerNormal Delivery Transit Time
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EXAMPLE CREDIT LIMIT PARADIGM
• Limit not to exceed customer's assessed ability to pay trade related obligations, in the normal course of business, within normal terms. Example formula: (company’s annual cost of the goods) * ((1/(the Risk Score))*0.05. Thus scaling down a limit as the score indicates higher risk.
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www.barrettwells.co.uk/RuEnScrCardCase.ppt
Ideas for the design of a Trade Credit ScoreCard can be found via the Google Search function on barrettwells.co.ukand this case study is available via the following link:
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TRADE CREDIT RATING & LIMIT MODEL
CreditScore TradeCreditRatingLimitas%ofCOG
Supplied*0.50‐0.74 a AAA 10.00‐6.76%0.75‐0.99 a AA+ 6.67‐5.05%1.00‐1.24 a AA 5.00‐4.031.25‐1.49 a AA‐ 4.00‐3.361.50‐1.74 a A+ 3.33‐2.871.75‐1.99 a A 2.86‐2.512.00‐2.24 a A‐ 2.50‐2.232.25‐2.49 a BBB+ 2.22‐2.012.50‐2.74 a BBB 2.00‐1.822.75‐2.99 a BBB‐ 1.82‐1.67
* SE
E F
OR
MU
LA O
N S
LID
E 3
3
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THE MOTIVE TO PAY
Make sure there is a motive to pay …..
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Creditis anOptionto Default TWO CHOICES
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Motive to Pay
What ‘drivers’ motivate someone
to pay after the goods have been
received?
PAYDON’TPAY
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Opportunity to Pay
What has to be ‘right’ in order to allow or enable
someone to pay?
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Internal Factors
• Invoicing• Transport and
delivery documentation
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Country Risk Factors• Host country foreign currency reserves• Foreign currency control regulations• Strategic nature of the
goods supplied• Government stability• Regional stability
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Absent M2OIf a potential customer does not have the means and the
motive and the opportunity to pay on time, only authorize deliveries provided payment security is first obtained.
Types of payment or transfer risk security include; payment in advance, letters of credit (confirmed or not), bank guarantees, undisclosed risk sharing agreements or
guarantees, Promissory Notes (avalised or not), Bankers’ Acceptances, Parent Company Guarantees, and credit insurance. Your administration must be excellent.
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SELLING RECEIVABLESReceivable risk! Receivable risk!
Fresh Receivable risk here!
Bargain prices!
Anyone for Receivable risk?
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Traditional Methods• ‘Non-recourse’ securitization, • discounting, • forfaiting, or • factoring arrangements.
These can be costly to arrange, and may have a negative impact on the weighted average
Probability of Default of the remaining portfolio.
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RECEIVABLE QUALITY WILL IMPACT COST OF CAPITAL
Corus Group plc (S&P: BB- / Positive) end 2004 reported the securitisation of certain of its trade debtors as follows:
GBP millions 2005 2004 2003Gross amount securitised: £272m £406m £338m
Less non-returnable proceeds: £272m £275m £215mNet securitised trade debtors: 0 £131m £123m
Other trade debtors: £1,410m £1,070m £847m
Trade debtors on balance sheet: £1,410m £1,201m £970m
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What is RequiredA means to sell receivables ‘without
recourse’ and without having to record the transaction as a loan, in compliance with
IAS 39 / IFRS 9.
Moreover, without negatively affecting the overall risk profile of the remaining
portfolio.
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The Art of Assessing, and Managing Post Delivery Payment Risk
Read full details in Global Credit Management – an Executive Summary available at bookstores and via: http://www.barrettwells.co.uk/bookshop.html
FALKIRK WHEEL
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AGENDA
49
• Payment Risk Assessment• Payment Risk Mitigation• Receivable Portfolio Management
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LETTERS OF CREDIT
….are not as secure as most believe them to be….
Be aware of:• Performance Risk and• Documentary Risk
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LIABILITY OF ISSUING & CONFIRMING BANKS
Article 7An irrevocable Credit constitutes a definite undertaking of the Issuing Bank, provided that the stipulated documents are presented to the Nominated Bank or to the Issuing Bank and that they constitute a complying presentation:( TO PAY ).
PAY
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ASSOCIATED RISKS
• 1. The DOCUMENTARY RISK as mentioned before.
• 2. The CREDIT RISK - will the bank(s) be there when it is time to pay?
It is NOT A GUARANTEE OF PAYMENT per se - there are 3 important risks to be borne in mind:
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Associated Risks• 3. The PERFORMANCE RISK - unless it
is an ex-ship delivery, title has usually passed to the buyer once the vessel has loaded, so the seller is at the mercy of the buyer - if an amendment to the LC is required for whatever reason.
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PARTIES• Applicant = Buyer.• Beneficiary = Seller.• Issuing / Opening Bank - opens the LC for
Buyer.• Confirming Bank - guarantees the Issuing
Bank.• Advising Bank - authenticates
& advises a credit.
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CONTRACT RELATIONSHIPS
APPLICANTBUYER
BENEFICIARYSELLER
ISSUING /OPENING
BANK
CONFIRMINGBANK
ADVISINGBANK
ONE
TWO
THREE
FIVE
FOUR
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OBJECTIVES• Purchases:
– Avoid demurrage.
• Sales:– Retain control of the commodity until an
acceptable LC is in place.– Get paid.
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KEY LC CONDITIONS-- OPERATIONS PERSPECTIVE --
• Goods Description.• Date of Bill of Lading / Transport Document.• Ports of Loading & Discharge.• Transshipment - Allowed or Prohibited?• Quantity (max. / silent = +-5% / about = +-10%).• Partial Shipment - Allowed or Prohibited?• Documents required (is an LoI allowed?).
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PAYMENT UNDERTAKINGS
58
Payment Undertakings are also sometimes called Purchase Confirmations. They ask no more of the Buyer than a simple but separate confirmation that the Buyer will fulfil the terms of the contract with the Seller. A Payment Undertaking does not impose any additional burden upon the Buyer over and above that already agreed in the purchase/sale contract. It is however a separate formal irrevocable document, usually addressed directly to a bank designated by the Seller.
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PU SECURITY PACKAGE• Buy / Sell Contract.
– Requires Buyer’s Payment Undertaking.– Permits assignment of Seller’s financial rights.
• Seller-Bank Risk Participation Agreement.
• Buyer’s authenticated Payment Undertaking sent to the Bank.
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PRECONDITIONS• Seller must find two or three banks (at least
one) that are willing to cover or share the particular Buyer payment risk - using only a Payment Undertaking as ‘collateral’ for the exposure.
• The text of a Risk Participation Agreement must be negotiated with the chosen Bank.
• The required PU and assignment contract clauses must be agreed with the Buyer.
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PU EXAMPLE TEXT IWe, ---ANOTHER-COMPANY--- (hereinafter called ‘---ANOTHER---’ and/or ‘Buyer’), hereby confirm that we have agreed to purchase from ---YOUR-COMPANY---(hereinafter called ‘Seller’) approximately ---AGREED-AMOUNT--- of ---AGREED-GOODS--- at a price to be calculated as below for delivery commencing during ---AGREED-TIME-PERIOD---.
The price calculation in ---AGREED-CURRENCY--- per ---AGREED-PRICE--- OR ---AGREED-PRICE-FORMULA---.
Settlement of the price for delivery of ---AGREED-GOODS--- to ---AGREED-DESTINATION--- (to be finalised by ---AGREED-DATE--- in accordance with the contract).
All as per contract dated ---CONTRACT-DATE--- and subsequent amendments, if any.
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PU EXAMPLE TEXT IIBuyer Reference ---789012---.Seller Reference ---987654---.
Subject to performance by the Seller, we ---ANOTHER--- hereby irrevocably and unconditionally confirm that we will pay the full invoice amount without any set-off, deduction or counter claim as designated in Seller’s commercial invoice to the account of ---A-BANK--- at ---ANOTHER-BANK--- in ---AGREED-COUNTRY---account number ---456789---, on the due date per the contract being not later than ---AGREED-DAYS--- after the delivery date (delivery date equals day zero), against presentation of Seller’s commercial invoice and the proof of delivery ---(BILL OF LADING FOR EXAMPLE)---.
This undertaking is to be construed in accordance with English law with exclusive jurisdiction in the Courts of England.
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FEATURES• Unsecured credit terms for Buyer.• No costs to Buyer for providing security.• Buyer’s usual lines of credit not restricted.• Intermediary bank risk and fees avoided. • Limited administrative effort for Buyer.• Seller may choose amount and timing of
retained Buyer payment and/or country risk.
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ADVANTAGES• SELLER:
– Flexible tool for risk portfolio management.– Costs of cover can be averaged down.– Inadequate lines of credit can be utilised.
• BUYER:– Improved profile with international banks.– Opportunity to build a good payment record.
• COST SAVINGS AVAILABLE TO SHARE.
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COMPETITIVE EDGE• The Payment Undertaking alternative
provides a foundation upon which a long term relationship can be firmly established between Seller and Buyer.
• The Seller is not limited by the need to manage payment risk exposure attaching either to the Buyer or the Buyer’s country.
• This could be a competitive advantage.
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Payment Undertakings
Read more on this subject at:http://www.barrettwells.co.uk/payment_undertakings.htmlOr read full details in Global Credit Management – an Executive Summary available at bookstores and via: http://www.barrettwells.co.uk/bookshop.html
FALKIRK WHEEL
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ITI @SMU Guest Lecture SeriesStrategic B2B Credit Risk Management
NETTING
67
Netting (or 'Set-off') involves effectively using our own perceived credit standing to reduce our exposure to the counterparty. There are four generic types of Netting as we have seen.
Netting is information systems and people intensive, hence costly. It also carries considerable Documentation Risk. When effecting a Netting close-out, it is extremely difficult to ensure all transactions are valued correctly and in real time. Hence it is easy to miss some small losses or windfall gains on a close-out.
Even in relation to negotiations based on ISDA framework documentation, there is a general lack of standardisation of requirements. The result is that the negotiation of Netting documentation proves time-consuming and arduous.
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NETTING
68
Settlement Netting that is effective only in respect of items of the same kind due on the same day. It takes effect only on the settlement day.
Novation Netting, in terms of which only like classes of transaction with the same settlement dates may be set-off against each other. It takes effect each time a subsequent transaction is entered into. Whilst risk reducing, it does not address netting on the occurrence of a default by a party.
Close-out Netting which stipulates that if there is a default by either party all mutual trades will be closed-out and set-off immediately. This is the most popular form of Netting.
Multi-lateral Netting which, outside of special clearing house systems, in practice is not generally effective in most jurisdictions.
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OTHER POPULAR TOOLS
69
Parent Company Guarantees (PCGs) are usually cost free and areeasy for a counterparty to arrange. However, they are ancillary to theprime contract. Hence lawyers could attack both the principal contractand the guarantee itself, if the PCG were called. Careful drafting istherefore essential. Which entity owns the Assets is a keyconsideration when deciding which entity should Guarantee.Third Party Guarantees are expensive to obtain and to process sothey are less common, particularly in relation to long term supplycontracts.
Credit Default Swaps (CDSs) - also known as Credit Derivatives -are another form of risk transfer to a third party. However the risktransferred and the payment triggers associated with that risk areusually not well correlated with a receivable risk.
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BUYER
SELLERTradeCard
Patented ComplianceEngine
THIRD PARTYSHIPPER
ORFORWARDER
COFACESWISS RE.
( AA )PAYMENT GUARANTEE
e-PURCHASE ORDER
e-INVOICE
e-PACKING LIST
e-PURCHASE ORDER
WAY BILL( e-CONFIRMATION THAT
GOODS SHIPPED PERPURCHASE ORDER )
THOMAS COOK BANKACH DEBIT
ORREVERSE MT202
CREDIT UPONRECEIPT OF
CLEARED FUNDS(TWO DAYS)
PAPER DOCUMENTS SENT AS USUAL IF REQUIRED
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AGENDA
71
• Payment Risk Assessment• Payment Risk Mitigation• Receivable Portfolio Management
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Reasonsto
Care
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AR Portfolio Examples*• Corus Group Plc £1,201 million
( 17% of total assets )• RD-Shell Group US$31,383 million
( 16% of total assets )• Ahold Group €1,516 million
( 7% of total assets )• Atos Origin €1,569 million
( 32% of total assets )
Atos Origin
AROther Assets
* FY 2004 FIGURES
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Telecoms ExamplesVODAFONE FRANCE
TELECOM VERSATEL
Trade Debtors (mio) £2,630.0 €9,469.0 €69.6
% Total Assets 1.79% 9.83% 6.34%
% Tangible Assets 4.92% 17.34% 6.49%
% of Revenue 7.94% 20% 10% *
Day Sales Outstanding 29 73 37
* estimate
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PORTFOLIO CREDIT RISK
2
8
45
2015
5 3 205
101520253035404550
AA A BBB BB B CCC CC C
AA A BBB BB B CCC CC C
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BELARUS UKRAINE POLANDHUNGARY BULGARIA
OTHER PORTFOLIO RISKS
Concentration Risk
Country Risk
FRANCHISE SUPERMARKETINDEPENDENT NATIONAL GROUPNICHE
Industry Consolidation
Globalisation
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WHAT S&P SAID ABOUT RECEIVABLE PORTFOLIOS
Calculating the amount of capital-at-risk from credit exposure entails an evaluation of a firm’s counterparties and assigning them a credit rating. Standard & Poor’s (S&P) will be augmenting other aspects of its analysis of firms … through the refinement of its methodology regarding capital-at-risk from operations and liquidity needs. Standard & Poor's ( http://www.standardandpoors.com ) November 2002
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Three Essentials• Understand the characteristics and
dynamics of the portfolio.• Decide the target characteristics of an
ideal portfolio.• Use portfolio management tools and
techniques to extract value from the portfolio.
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Some Useful Aspects• Exposure by credit rating class.
• Exposure by country or region.
• Exposure by market.
• Exposure by industry sector.
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A $
500
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S W
AYS
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Extracting Value• Cost effectively accommodating
additional risk
• Reducing the Cost of Capital
• Reducing Working Capital
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Adding Value
• Cost effectively accommodating additional risk
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Mitigating Payment Risk Creatively
Providing Competitive Advantage
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PORTFOLIO CREDIT RISK
2
8
45
2015
5 3 205
101520253035404550
AA A BBB BB B CCC CC C
AA A BBB BB B CCC CC C
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RISK-AVERSE PORTFOLIO45
2015
85
2 3 205
101520253035404550
AA A BBB BB B CCC CC C
AA A BBB BB B CCC CC C
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SKI-JUMP PORTFOLIO
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RISK-AVERSE PORTFOLIO45
2015
85
2 3 205
101520253035404550
AA A BBB BB B CCC CC C
SKI-JUMP PORTFOLIO
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POR
TFO
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DP = 2.27
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POR
TFO
LIO
MA
NA
GEM
ENT
AN
D
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MPE
TITI
VE A
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DP REDUCED TO 2.21
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POR
TFO
LIO
MA
NA
GEM
ENT
AN
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TITI
VE A
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DP RETURNS TO 2.27
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Portfolio Risk Management Tools
Workability and Availability
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THE ATTRIBUTES OF TOOLS THAT WORK
• Have minimal impact – preferably no impact – on the transaction or series of transactions covered.
• Do not require any explicit disclosure to the counterparty.
• Are certain to pay if a guaranteed risk occurs.
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B2B RISK MANAGEMENT INSTRUMENTS
• Risk Sharing Agreements
• Undisclosed Payment Guarantees
• Single Risk Credit Insurance
• Conditional Receivable Purchase Agreements
• Credit Default Swaps
NOW AVAILABLE:
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Credit Default Swaps (CDSs)A CDS is a contract in terms of which one party (the purchaser of default protection) undertakes to pay the other (the seller of default protection) a fee for protection against the occurrence of one or more specified events in relation to a third party, called the ‘reference party’. If one or more of the specified events occurs – as evidenced by publicly available information – the seller of default protection will pay compensation to the buyer of protection either through ‘physical’ or ‘cash’ settlement.
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Petroplus International NV
Moody’s Investors Service
Senior Unsecured Notes rating B3 / Negative Outlook on April 27, 2004
( equivalent to S&P rating B- )
CREDIT DEFAULT SWAP EXAMPLE
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Petroplus International NV
Electricity Supplier
Purchases a CDS basis ‘if Petroplus International NV defaults in respect of its Senior Unsecured Notes at any time before a specified date (as witnessed by a public announcement of this occurrence) the seller of the CDS (a bank) will pay the electricity supplier €1 million, being equivalent to the average cost of electricity purchased by Petroplus in any one month’.
CREDIT DEFAULT SWAP EXAMPLE
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Petroplus International NV
Note there is a lack of correlation between the risk and the structure of the risk mitigant …Petroplus may not pay for electricity supplied but also not default in respect of its Senior Notes; so the CDS will not pay out.
Petroplus may default on its Senior notes but nevertheless pay for electricity supplied; so the supplier receives €1 million, and is therefore effectively paid twice.
CREDIT DEFAULT SWAP EXAMPLE
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Receivable Portfolio Management
Read more on this subject at:http://www.barrettwells.com/DayRob%20ARPortfolioMgmtMar07.pdfOr read full details in Global Credit Management – an Executive Summary available at bookstores and via: http://www.barrettwells.co.uk/bookshop.html
FALKIRK WHEEL
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ITI @SMU Guest Lecture SeriesStrategic B2B Credit Risk Management
DisclaimerJust to emphasise that the opinions, ideas and suggestions expressed throughout this presentation are mine alone. In making this presentation I do not represent any other organisation, my employer, or any other person.
This presentation is simply a sharing of ideas with a view to stimulating a debate, which may lead to the widespread adoption of a holistic, future-oriented approach to counterparty risk management.
Ron Wells
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唤醒平衡表上的睡狮国际信用管理实用指南
Huan Xin Ping Heng Biao Shang De Shui Shi Guo Ji Xin Yong Guan Li Shi Yong Zhi Nan
ISBN 978-988-99586-1-9
Awaken the Sleeping Lion on the Balance Sheet an Executive Summary for Global Credit Management
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Ron Wells wrote Global Credit Management, an Executive Summary published by John Wiley & Sons. This concise work describes effective credit risk management, which too often is a passive and reactive discipline within a company. It includes practical guidance to equip a reader with the basic tools necessary to establish a holistic credit management discipline. The Mandarin Chinese (simplified characters) version of Global Credit Management was published in July 2007, titled Huan Xin Ping Heng Biao Shang De Shui Shi – Awaken the Sleeping Lion on the Balance Sheet. See www.t3plimited.com (Chinese version: www.t3plimited.net) for details. Ron maintains a free access, credit management resources web site at: www.BarrettWells.co.uk. He has delivered numerous presentations relating to credit and performance risk management, and taught several classes in related subjects; see www.barrettwells.com for details. Ron is a Certified Credit Executive (CCE), a Chartered Management Accountant (ACMA), a qualified International Banker (ACIB) and a Chartered Corporate Secretary (FCIS). He participated in the NACM Graduate School for Credit and Financial Management in 1996/97, passed with distinction and was elected Best Student. Ron joined Cargill International Trading in Singapore as Asia Credit Manager for Energy, Transportation and Industry in February 2011. He was Vice President - Credit Risk Management of RBS Sempra Commodities in London from October 2007, and became Executive Director of Counterparty Risk Analysis and Portfolio Management EMEA, when J.P. Morgan’s Global Commodities Group purchased RBS Sempra on July 1, 2010. Previously Ron was Credit Manager for Global Supply & Trading with Chevron Corporation for 16 years. Ron earlier worked for various companies and commercial banks becoming a specialist in financial analysis, corporate credit management, trade operations management and trade finance marketing.