The Risk Management Group of a financial institution.
Client wishes to revise its internal rating system.
Client had an internal rating system but it was not sufficiently granular to accommodate an expanded volume of loans and guarantees for a wider creditor universe. It needed the system to be Basel II compliant and wanted to follow international best practice by assessing both borrower and transaction risks.
SCIC studied internal rating systems of similar institutions in order to gain a market perspective. SCIC analyzed the Client's (i) internal ratings, mapping them to external ratings and (ii) internal rating methodologies.
SCIC developed a credit risk classification system with finer granularity incorporating both borrower and transaction dimensions, and provided rating methodologies for different classes of borrowers and transactions, improving the Client's capacity to assess individual and portfolio credit risks.
The Client now has a common internal language and process for credit risk assessment and monitoring which facilitates more focussed discussion on credit risks among deal origination, risk management, and risk monitoring staff. The client is better able to assess its capital adequacy and use robust internal ratings as inputs for its economic capital model.
A specialized European lender.
Client seeks an Investment Grade (Triple-A) rating on a stand-alone basis (without a government guarantee).
The client, which was formerly guaranteed by its triple-A rated sovereign owner, was facing the prospect of a reduction in the government's shareholding and a loss of the government's guarantee.
SCIC believed that the Client's creditworthiness was strong and demonstrable with careful written and oral presentations on its solid balance sheet, shareholder relationships, and prudent financial controls to ensure sound asset quality, liquidity and capitalization.
SCIC prepared a comparative credit analysis showing the credit strengths of the Client in relation to its peer group, coached the Client for meetings with the ratings agencies, advised on follow-up questions from the rating agencies and thus helped the Client obtain top ratings.
The Client obtained triple-A ratings from both Moody's Investors Service and Standard & Poor's and launched a multibillion dollar borrowing program in the international capital markets.
De novo non-bank finance company (NBFC) in an emerging market country specializing in student lending for domestic and US graduate studies.
Client needs private equity investors.
Promoters needed a seed equity investment from a strategic partner to build credibility and commence operations and second-stage equity to take out the original investor.
Client had built value in a prior new venture in business process outsourcing with a US investor and US clients; the client had also built value in the de novo-NBFC space which could attract a second-round investor.
SCIC identified an initial strategic investor with experience in the international student loan markets; two years later SCIC identified a second-round investor who bought out the original investor.
Client was able to successfully launch a new venture and grow it to a ~ US$700 million equivalent balance sheet.
International financial institution.
Developing financial guarantee products for emerging markets.
The Client wanted to develop financial guarantee products to deploy its triple-A ratings to support asset-backed and infrastructure revenue-backed financings for private sector clients to promote domestic capital market development.
Client has provided political risk guarantees and wishes to provide financial guarantee products that add value either alone or in conjunction with public-private partnerships.
SCIC designed a menu of credit guarantee products for the Client to offer. The menu was approved and is now being offered to the market. SCIC also helped the Client work with the private financial guarantee industry with co-insurance structures.
Client guarantee provides higher ratings and facilitates collaboration with international financial guarantors and local market sponsors, facilitating capital market access for private sector entities.
SCIC has advised banks, non-bank finance companies and insurers / reinsurers on varied, successful assignments. Clients have included banks in Europe, Africa, Middle East and Asia. Clients have included the UBS, Dexia, Banco Finantia, ICICI, HDFC Credila, Access Bank of Nigeria, Union Bank of Nigeria, Ecobank Transnational Inc., TAIB, BPN, Sterling Bank, Baytree Finance Company, Africa Reinsurance Corp., etc.
SCIC has advised multilateral development banks or ratings, risk management, and structured finance. Clients have included the World Bank, NIB, Inter-American Development Bank, Central American Bank for Economic Integration, African Development Bank, Africa Reinsurance Corp., Asian Development Bank, Africa Finance Corp., Banque Ouest Africaine de Développement, East African Development Bank, OPEC Fund for International Development, etc.
SCIC has advised government-owned financial institutions primarily on ratings and structured finance. Clients have included the Central Bank of the Bahamas, Bank of Uganda, OeKB, Swedish Export Credit, Kommunalbanken Norway, etc.