Objectives On completion of this tutorial, you will be able to:

• Identify the different types of covenant, why they are necessary, and the issues involved in monitoring them and managing any breaches
• Recognize the crucial nature of the decision to accept credit risk, and the need for such decisions to be made by the appropriate credit authority

Tutorial Overview This first part of this tutorial looks at covenants that are included by banks and other lenders in credit facility agreements. It describes the various types of covenant that are used, with particular focus on financial covenants, which are the most exacting type. The actions required to deal with both potential and actual breaches of covenants are also outlined. The second part of the tutorial looks at credit decisions and how they are made. The importance of credit authority levels in making such decisions is described in some detail. Prerequisite Knowledge Credit Risk Customer Management - Structuring Credit Facilities Tutorial Level: Intermediate Tutorial Duration: 60 minutes