Learning Objectives
By the end of this module, you will be able to:
Understand the Purpose of Debt Servicing
Recognise debt servicing as a core part of assessing a client’s ability to meet interest expenses when due
Align commercial loan principal repayments with the client’s cash flow.
Evaluate Key Debt Servicing Metrics
Calculate and interpret key ratios like the Interest Coverage Ratio (ICR) and Debt Service Coverage Ratio (DSCR) using EBITDA or CFADS.
Use these metrics to evaluate a client’s debt servicing capacity and identify early warning signs.
Tailor Loan Structures to Match Repayment Capacity
Recommend appropriate repayment options (e.g. interest-only periods, tenor extensions, or step-up loan principal repayments) based on the client’s ability to service debt.
Structure facilities that align with the client’s cash flow while minimising repayment risk and supporting their growth.
Apply Stress Testing and Risk Mitigation Tools
Conduct stress testing to model downside scenarios (e.g. revenue decline, rising interest rates).
Recommend practical risk mitigants such as debt covenants, interest rate caps, or repayment buffers.
Apply Debt Servicing Insights to Real-World Scenarios
Practise applying debt servicing analysis through real-world case studies to strengthen your credit analysis skills
Learn to monitor servicing performance over time to identify emerging risks, adjust loan structures when needed, and engage clients proactively.
