In the complex world of capital markets, understanding securitized products from an investor’s perspective is crucial for making informed decisions, managing risk, and optimizing portfolio returns. As these products evolve to include new asset classes and innovative structures, investors must possess a deep analytical toolkit to properly assess value, navigate legal and regulatory landscapes, and execute successful investment strategies. This requires moving beyond a simple understanding of the mechanics of securitization to a sophisticated grasp of market dynamics, valuation models, and the nuances of deal-specific due diligence.

This comprehensive 10-day training course is designed for professionals who need to master the art and science of investing in securitized products. We will provide you with the critical knowledge to evaluate credit quality, analyze structural features, and identify value across various asset-backed securities. Through detailed case studies and practical exercises, you will learn to dissect offering documents, model cash flows, and manage the performance of a securitized portfolio. By the end of this course, you will be equipped to confidently engage in the structured finance market and capitalize on its unique opportunities.

Duration

10 days

Target Audience

• Institutional investors and portfolio managers
• Hedge fund and private equity analysts
• Credit risk professionals and fixed-income traders
• Buy-side analysts and due diligence specialists
• Wealth managers and financial advisors
• Regulators and compliance officers
• Consultants and financial market researchers

Objectives

• Understand the diverse universe of securitized products and their characteristics.
• Master valuation methodologies and cash flow modeling techniques.
• Develop a robust framework for credit analysis and risk assessment.
• Analyze legal, structural, and regulatory risks from an investor's standpoint.
• Evaluate the role of credit rating agencies and third-party due diligence.
• Formulate effective investment and portfolio management strategies.
• Identify and capitalize on opportunities in both traditional and new asset classes.
• Navigate the post-issuance surveillance and performance monitoring process.
• Grasp the impact of market trends and economic cycles on investor returns.

Course Modules

Module 1: The Investor's View of Securitization

• An overview of securitized products from a portfolio manager's perspective.
• The motivations for including structured products in an investment portfolio.
• An analysis of the risk/return profile of different securitized assets.
• Key terminology and concepts essential for an investor.
• The role of securitized products in modern portfolio theory.

Module 2: Cash Flow and Valuation Fundamentals

• Understanding the waterfall structure and its impact on tranches.
• Building basic cash flow models for mortgage-backed securities (MBS).
• Analyzing the components of yield and return for investors.
• The importance of prepayment and default assumptions.
• An introduction to discounted cash flow (DCF) valuation for structured products.

Module 3: Credit Analysis and Risk Assessment

• A deep dive into the credit analysis of underlying assets.
• Evaluating the quality and performance of collateral pools.
• Assessing the effectiveness of credit enhancement mechanisms.
• The impact of macroeconomic factors on asset performance.
• Developing a checklist for due diligence on a securitized deal.

Module 4: Residential Mortgage-Backed Securities (RMBS)

• A detailed look at the structure and characteristics of RMBS.
• Analyzing prepayment risk and its effect on investor returns.
• Understanding agency vs. non-agency RMBS.
• The role of servicers in the performance of RMBS.
• A practical case study on evaluating an RMBS investment.

Module 5: Commercial Mortgage-Backed Securities (CMBS)

• The unique features and risks of CMBS.
• Analyzing the property-level characteristics and loan terms.
• The use of loan-to-value (LTV) and debt service coverage ratio (DSCR).
• Understanding the role of special servicers and the master servicer.
• The impact of commercial real estate market cycles on CMBS.

Module 6: Asset-Backed Securities (ABS)

• An overview of the diverse world of ABS (e.g., auto loans, credit cards).
• The specific risks and characteristics of different ABS types.
• Evaluating the credit quality of a consumer loan portfolio.
• The role of historical performance data in assessing credit risk.
• A case study on investing in an auto loan ABS.

Module 7: Collateralized Loan Obligations (CLOs)

• An in-depth exploration of CLO structures and collateral.
• The role of the collateral manager and the investment strategy.
• Evaluating the credit quality of the leveraged loan portfolio.
• The impact of interest rate changes on CLO cash flows.
• Analyzing CLO tranches and their respective risk profiles.

Module 8: Credit Rating Agencies and Third-Party Analysis

• Understanding the methodologies and role of rating agencies.
• How to interpret and use credit ratings effectively.
• The importance of conducting independent due diligence.
• The limitations and potential conflicts of interest for rating agencies.
• The role of third-party valuation and analytics firms.

Module 9: Legal and Structural Due Diligence

• A deep dive into key legal documents (e.g., prospectus, offering circular).
• Understanding the implications of a true sale opinion.
• The importance of representations and warranties.
• Analyzing structural features like triggers and cash flow stops.
• The role of the indenture and its impact on investor rights.

Module 10: Portfolio Management Strategies

• Formulating investment theses for different securitized products.
• Building and managing a diversified portfolio of structured products.
• The use of securitization to manage duration and interest rate risk.
• Hedging strategies for securitized products.
• The impact of liquidity and trading dynamics on portfolio decisions.

Module 11: Trading and Pricing

• The mechanics of secondary market trading for securitized products.
• The factors that influence pricing and market liquidity.
• Understanding spread analysis and relative value.
• The role of market makers and institutional trading desks.
• A practical session on using market data to inform trading decisions.

Module 12: Performance Monitoring and Surveillance

• The importance of post-issuance surveillance and data reporting.
• Monitoring collateral performance and servicer reports.
• The use of surveillance reports and market indicators.
• Identifying early warning signs of credit deterioration.
• The role of data analytics in tracking portfolio health.

Module 13: Regulation and Market Evolution

• An overview of the regulatory landscape from an investor's perspective.
• The impact of regulations on product design and market access.
• The role of regulators in ensuring market stability and investor protection.
• A discussion on the future of regulation for digital and sustainable products.
• The impact of central bank policies on securitized product valuations.

Module 14: Case Studies in Investment Decisions

• A detailed analysis of a successful investment in a securitized deal.
• Learning from a case study of a deal that went bad and the lessons learned.
• Examining the decision-making process for different investor types.
• A discussion on the impact of deal structure on investor returns.
• Evaluating investment opportunities in a volatile market environment.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.