Standard & Poor's Fundamentals of Corporate Credit Analysis 1st edition, Blaise Ganguin

"In a world of increasing financial complexity and shorter time frames in which to assess the wealth or dearth of information, this book provides an invaluable and easily accessible guide of critical building blocks of credit analysis to all credit professionals."
--Apea Koranteng, Global Head, Structured Capital Markets, ABN AMRO

"The authors do a fine job of combining latest credit risk management theory and techniques with real-life examples and practical application. Whether a seasoned credit expert or a new student of credit, this is a must read book . . . a critical part of anyone's risk management library."
--Mark T. Williams, Boston University, Finance and Economics Department

"At a time when credit risk is managed in a way more and more akin to market risk, Fundamentals of Corporate Credit Analysis provides well-needed support, not only for credit analysts but also for practitioners, portfolio managers, CDO originators, and others who need to keep track of the creditworthiness of their fixed-income investments."
--Alain Canac, Chief Risk Officer, CDC IXIS

Fundamentals of Corporate Credit Analysis provides professionals with the knowledge they need to systematically determine the operating and financial strength of a specific borrower, understand credit risks inherent in a wide range of corporate debt instruments, and then rank the default risk of that borrower. Focusing on fundamental credit risk, cash flow modeling, debt structure analysis, and other important issues, and including separate chapters on country risks, industry risks, business risks, financial risks, and management, it guides the reader through every step of traditional fundamental credit analysis.

In a dynamic corporate environment, credit analysts cannot rely solely on financial statistical analysis, credit prediction models, or bond and stock price movements. Instead, a corporate credit analysis must supply loan providers and investors with more information and detail than ever before. On top of its traditional objective of assessing a firm's capacity and willingness to pay its financial obligations in a timely manner, a worthy credit analysis is now expected to assess recovery prospects of specific financial obligations should a firm become insolvent.

Fundamentals of Corporate Credit Analysis provides practitioners with the knowledge and tools they need to address these changing requirements. Drawing on the unmatched global resources and capabilities of Standard & Poor's, this valuable book organizes its guidelines into three distinct components:

Part I: Corporate Credit Risk helps analysts identify all the essential risks related to a particular firm, and measure the firm through both a financial forecast and benchmarking with peers
Part II: Credit Risk of Debt Instruments explains the impact of debt instruments and debt structures on a firm's recovery prospects should it become insolvent
Part III: Measuring Credit Risk presents a scoring system to assess the capacity and willingness of a firm to repay its debt in a timely fashion and to evaluate recovery prospects in the event of financial distress

In addition, a fourth component--Cases in Credit Analysis--examines seven real-life studies to provide examples of the book's theory and procedures in practice. Senior Standard & Poor's analysts explore diverse cases ranging from North and South America to Europe and the Pacific Rim, on topics covering mergers (AT&T-Comcast, MGM-Mirage, Kellogg-Keebler), foreign ownership in a merger (Air New Zealand-Ansett-Singapore Airlines), sovereign issues (Repsol-YPF), peer comparisons (U.S. forestry), and recovery analysis (Yell LBO). Industry "Keys to Success" are identified and analyzed in each case, along with an explanation on how to interpret performance and come to a credit decision.

While it is still true that ultimate credit decisions are highly subjective in nature, methodologies and thought processes can be repeatable from case to case. Fundamentals of Corporate Credit Analysis provides analysts with the knowledge and tools they need to systematically analyze a company, identify and analyze the most important factors in determining its creditworthiness, and ensure that more "science" than "art" is used in making the final credit decision.

I had read other reviews saying that this book is quite topical, and I have to say they were right. I work for a community bank analyzing small businesses, there was almost nothing in here that was of use to me. I realize that this is SP and that the type of analysis they do involves large corporations, but it was still too generic and too specific in all the wrong places. I would have really appreciated a chapter on how to analyze distressed borrowers, but there was nothing in here on this subject beyond the obvious.

If you need a basic guide to credit analysis this book is great. Understand that it is a practioner's guide moreso than an academic textbook which means it's shorter and less detailed. I would recommend supplementing it with an actual textbook on financial statement analysis and financial risk management if you do not have a financial background. Overall though it's worth the price.

I purchased this book as a review/primer for a full credit training course with my employer. I am two years out of school and wanted to give myself a solid background as the training was graded and competitive.

This book gives a solid background on the fundamentals that one would need to understand. It is by no means exhaustive. The training I went through was six weeks and this book totaled roughly the equivalent of one week of class work and independent study. That said, it touches on every major area so I felt very prepared going into each and every class. Also, the case studies at the end were especially useful as part of the class (and every similar class I am aware of) includes a full case study/credit presentation as the final report.

I would highly recommend this book for anyone preparing for a similar training program or to transition into any corporate credit analysis position, however, it is not a substitute by any means. I believe it would also serve as a great refresher or reference book for someone returning to the industry or even someone with experience.

I had the pleasure of working with one of the authors 15 years ago. But don't let that sway you. I truly appreciate the scope and effort put into this book. We will use it as an outline for how our analysts should approach analyzing a credit. Chapter 3 alone is worth the price of admission as the authors list the elusive "qualitative" factors that go into a credit rating, beyond what the ratios tell you it should be. While the book barely scratches the surface of certain analytical methods (the Merton Model got 1/2 a page), and it is written more for the layman or student, I still learned many things. And I've been in the business 20+ years. The prior reviewer, and many others will say they wished they wrote this book. I will too. I even briefly started my own version recently. But I first turned to S&P's ratings criteria as an outline. As such, the right people wrote this book. The authors fully used the vast resources and data mining of S&P. This certainly feels like a team effort. The telecom analyst wrote a piece on the rapid decline of telecom credits in 2000-2002, and other professionals added real life examples. The book organizes itself in the top down approach to analysis. It starts with sovereign risk, then moves to industry, then company business/competitive risk. It then highlights the ratios to look for, and also gives data on seniority and recovery values for specific levels of debt. It then uses these tools to analyze a fictional company. It ends with case studies that cover M&A, sovereign risk and other topical reviews that act as a real life summary to what you just learned. Highly recommended. Well done.

This book is long overdue. It typically takes a credit or corporate banking professional several years and several levels (analyst, senior analyst, associate/assistant vice president, and finally, vice president) to piece together the knowledge and analytical skills presented within this wonderful book. The book offers a comprehensive foundation in business, financial, and strategic analysis (among several other related topics) in a very easily digested and understood manner. I guess my only complaint is that I didn't have the opportunity to write it myself!! I would advise every credit or relationship management team leader to purchase this book for their entire team -- particularly for their analysts and associates (although... on second thought, perhaps everyone on the team should have a copy in their desk drawer.) Bottom line: Highly-recommended.

Product Details :
Hardcover: 428 pages
Publisher: McGraw-Hill; 1 edition (December 9, 2004)
Language: English
ISBN-10: 0071441638
ISBN-13: 978-0071441636
Product Dimensions: 6.5 x 9.2 inches

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The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order 1st Edition, Benn Steil

When turmoil strikes world monetary and financial markets, leaders invariably call for 'a new Bretton Woods' to prevent catastrophic economic disorder and defuse political conflict. The name of the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century's second great war, has become shorthand for enlightened globalization. The actual story surrounding the historic Bretton Woods accords, however, is full of startling drama, intrigue, and rivalry, which are vividly brought to life in Benn Steil's epic account.

Upending the conventional wisdom that Bretton Woods was the product of an amiable Anglo-American collaboration, Steil shows that it was in reality part of a much more ambitious geopolitical agenda hatched within President Franklin D. Roosevelt's Treasury and aimed at eliminating Britain as an economic and political rival. At the heart of the drama were the antipodal characters of John Maynard Keynes, the renowned and revolutionary British economist, and Harry Dexter White, the dogged, self-made American technocrat. Bringing to bear new and striking archival evidence, Steil offers the most compelling portrait yet of the complex and controversial figure of White--the architect of the dollar's privileged place in the Bretton Woods monetary system, who also, very privately, admired Soviet economic planning and engaged in clandestine communications with Soviet intelligence officials and agents over many years.

A remarkably deft work of storytelling that reveals how the blueprint for the postwar economic order was actually drawn, The Battle of Bretton Woods is destined to become a classic of economic and political history.

Benn Steil is an exceptional scholar hailing from the Council on Foreign Relations. I approached this book with high expectations and was not disappointed. If I had a buck for every blog, article, or interview referring to the Bretton Woods conference, dollar hegemony, the gold standard, and related monetary matters I could stop reading stuff like this because I would be rich. I surmise, however, that not one in 100 understand what really happened. I do not know if this is THE definitive work on the Bretton Woods conference but it certainly is a definitive treatise. Those who love quotes will burn through a few highlighters. (I did.) The intense discussions--snarky attacks and counterattacks by the combatants--are relayed in detail and in living color. Steil successfully takes you back to the events as though you were there. Minor warning: You do not need to be a wonk to love this book, but you must have some appreciation for wonky. It is not dumbed down to the lowest common denominator. Currency jocks will love the detailed descriptions of the battles over fixed exchange rates, adjustable exchange rates, free trade, dollar hegemony, and the role of gold in this new era.

Steil's discussion can be crudely described in three parts: (1) the decades leading up to the 1944 Bretton Woods conference; (2) the actual conference in which the next 50 years of currency exhanges and global trading rules would be mapped out; and (3) the consequences to the post-war world. The conference stemmed from a few astute players who realized that the world could fall into chaos if plans were not made in advance to establish a global currency regime and rules of global trade--a New World Order. This is that story and the subplots that bring life to the historically profound period.

At stake was a power struggle between the British and the US to establish post war dominance. My preconceived (and decidedly incorrect) notion of WWII was naively simple: the Brits got in a pan-European brawl; the isolationist-prone US sent massive military weaponry and aid via the Lend-Lease program to their strong ally; with Pearl Harbor as a proximate trigger, we entered the war. In reality, the Americans and the British were in a battle royale. The British were trying to establish an aid arrangement that would leave them strong enough to recover some of their imperial splendor after the war. The Americans placed extremely stringent demands on the so-called Lend-Lease program with the explicit intention of leaving the British economically prostrate to ensure American hegemony. There was nothing warm and fuzzy about the alliance. The Battle of Bretton Woods was indeed a battle spanning a number of years, and it got very ugly.

A large portion of the fight was by proxy through two critical figures. Economist John Maynard Keynes, one of the most prominent intellects of the 20th century (whether you like his economic theories or not, which I don't) squared off against Harry Dexter White, a determined yet highly enigmatic American. These two guys were attempting to determine the fate of the global economy through a war of wits and fierce negotions over three years preceeding the conference and at the conference with representatives from dozens of nations. At the conclusion of the conference, each was forced to turn their ample skill to beat back fierce resistance with their respective political elites back home to sell the agreements. It was arguably a fight to the death: both White and Keynes died of heart attacks soon thereafter. One could legitimately argue the Battle killed them.

My image of and respect for Keynes evolved enormously, not as an economist but rather as an unlikely diplomat. He was cantankerous to a fault, but he somehow found a way to compromise when necessary to optimize an otherwise very weak position for Britain and, most importantly, help seal an historically profound agreement. Harry Dexter White's character is confounding and enigmatic. He displayed an unorthodox desire for a strong post-war Russian-Soviet alliance. His pro-Soviet stance is a fascinating sub-plot that only begins to clarify in the post war (cold war) period.

The detailed analysis up to the mid 1950s gives way to a relatively brief synopsis in which Steil races us through the next half century briskly. This final portion, most of which is contained in the Epilogue, is filled with subject matter popular in the blogosphere that I had read many, many times. Steil takes us through deGaulle demanding gold, Nixon taking us off the last residue of the gold standard, the dollar's impact as the reserve currency, and central bankers aggressively fiddling with monetary policy. There was, however, a difference between this post-war synopsis and the reading the blogs: I understood it in a much deeper, contextually accurate way. I've finally got it; I understand our roots. Does it leave me more sanguine about current monetary policies and about the future? Not in the slightest.

Product Details :
Hardcover: 472 pages
Publisher: Princeton University Press (February 24, 2013)
Language: English
ISBN-10: 0691149097
ISBN-13: 978-0691149097
Product Dimensions: 9.3 x 6.2 x 1.6 inches

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