CaseMark Conducting Credit Committee Presentations
Structures credit committee packages with borrower analysis, risk assessment, structuring proposal, and recommendation documentation.
When To Use
- Preparing a new deal for credit committee approval (direct lending, leveraged loan, or syndicated facility)
- Updating an existing credit for annual review, amendment, or waiver request
- Documenting the committee's decision rationale for audit and regulatory files
- Presenting a workout, restructuring, or watchlist escalation to the committee
Inputs To Gather
- Borrower financials: Audited and interim statements, quality-of-earnings adjustments, management projections
- Deal terms: Term sheet or commitment letter, pricing grid, covenants, maturity, amortization schedule
- Industry data: Sector overview, peer comps, relevant market benchmarks (e.g., LCD/Pitchbook leveraged lending stats)
- Collateral / security package: Asset appraisals, lien priority, guarantor analysis
- Third-party reports: Appraisals, environmental, insurance certificates, legal due diligence memos
- Internal risk rating: Proposed rating with scorecard inputs, migration history if existing borrower
- Sponsor / management background: Track record, key-person risk, ownership structure
Workflow
Build the Executive Summary
- One-page overview: borrower name, industry, transaction type (new money / refinancing / amendment), requested facility size, and clear recommendation (approve / approve with conditions / decline).
- State the investment thesis in 2–3 sentences: why this credit fits the portfolio mandate.
Draft the Borrower & Industry Analysis
- Company overview: business model, revenue mix, customer concentration, competitive positioning.
- Historical financial performance (3–5 years): revenue, EBITDA, margins, capex, free cash flow.
- Industry dynamics: cyclicality, regulatory exposure, secular trends. [VERIFY sector-specific risk factors against current market conditions]
Present the Financial Model & Projections
- Base, upside, and downside cases with key assumptions stated explicitly.
- Credit metrics at each scenario: Total Debt / EBITDA, Senior Secured / EBITDA, Interest Coverage, Fixed Charge Coverage, Debt / Total Capitalization.
- Sensitivity tables on revenue decline, margin compression, and interest rate changes.
Detail the Proposed Structure
- Facility breakdown: tranches, sizes, pricing (spread + floor), OID, maturity, amortization.
- Covenant package: financial maintenance covenants (leverage, coverage) with proposed levels and cushion analysis; incurrence covenants and key negative covenant baskets.
- Security and guaranty package, including intercreditor considerations for multi-tranche deals.
- Fees: commitment, unused, agency, prepayment penalties.
Assess Key Risks & Mitigants
- Enumerate top 5–7 risks (industry, operational, financial, structural, sponsor, legal/regulatory).
- For each risk, state the specific mitigant or structural protection.
- Include downside recovery analysis: estimated enterprise value at stress, coverage of secured debt.
Assign Internal Risk Rating
- Apply the institution's rating methodology; show scorecard inputs and outputs.
- Compare to external ratings if available (Moody's, S&P, Fitch). [VERIFY rating methodology aligns with current internal policy]
- Note any overrides or qualitative adjustments with justification.
State the Recommendation & Conditions
- Clear approve / conditional approve / decline recommendation.
- List all conditions precedent to closing (legal opinions, insurance, environmental sign-off, KYC completion).
- Specify any portfolio-level considerations: hold size vs. target, industry concentration limits, single-obligor limits. [VERIFY against current portfolio limits and concentration policy]
Compile Appendices
- Detailed financial statements and spreads
- Organizational chart and ownership structure
- Comparable transaction / comp table
- Draft term sheet or markup summary
- Covenant compliance projections over the facility life
Output
A complete credit committee package containing:
- Executive summary (1 page) with clear recommendation
- Borrower & industry analysis (2–4 pages)
- Financial model summary with scenario analysis and sensitivity tables
- Structuring memo covering terms, covenants, and security
- Risk matrix mapping each identified risk to its mitigant
- Internal risk rating worksheet
- Appendices with supporting data and documentation
Format the package to match the institution's standard credit memo template. Use consistent units ($ in millions unless otherwise noted), and label all EBITDA figures as to whether they are reported, adjusted, or pro forma.
Quality Checks
- Every financial metric ties back to the sourced financial statements or QoE report
- Base, upside, and downside scenarios use clearly stated and differentiated assumptions
- Covenant cushion analysis shows headroom at each projection period under the base case
- Risk section addresses at minimum: industry, leverage, cash flow, collateral, and sponsor/management risk
- Internal risk rating is calculated per current policy with any overrides documented
- Hold size and concentration are checked against portfolio limits [VERIFY current limits]
- All [VERIFY] items have been resolved or flagged for committee discussion
- No inferred data is presented as confirmed — assumptions are labeled explicitly