IN-PERSON CLASSROOM SEMINARS

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Evaluating Credit Risk in Power and Gas Companies--In Partnership with SNL Energy


A Two-Day Classroom Seminar (CPE Approved)

Register Soon to get Early Bird Pricing.

In an industry that is among the most capital-intensive in the United States, the ability to produce credible, independent assessments of creditworthiness has never been more necessary.

Over the course of one and a half days, this program shows you how to evaluate credit risk at every level of a utility, from the operating company up to the holding company. The course covers regulated electric and gas utilities, as well as independent power generators and competitive energy providers.

For professionals within the industry, Evaluating Credit Risk is a comprehensive overview that broadens your context and breaks you out of your silo, allowing you to see the connections between your role, the enterprise finance functions, and the debt capital markets.

For outside credit analysts, the course is just as useful. Through lectures, classroom exercises and case studies, you'll come to understand the risk factors unique to the power and gas sectors, allowing you to produce the analysis your job requires.

What You Will Learn
  • Understanding how corporate structure affects credit-worthiness
  • How to interpret utilities' four sets of accounting books
  • Financial ratio analysis - what ratios work in this sector and what ratios to avoid
  • Keys to understanding utility regulation and rate orders
  • Knowing the statistical basis of credit ratings
  • How to integrate market-derived alternative ratings into your credit view
  • Threats to liquidity and solvency; special elements of utility sector bankruptcy; recovery in the event of default
Seminar Agenda
Untitled Document
7:30 am

DAY ONE - Tuesday, October 16

Registration and continental breakfast open.

All sessions taught by Ellen Lapson, CFA, unless otherwise noted

8:15 am

Program begins

Welcome and Introductions

Overview of Credit Risk Analysis in Power and Gas Companies; Economic and Regulatory Framework
  • How credit analysis is used
  • The role of credit agencies and the implications of their actions
  • Statistical basis of ratings (probability of default and Loss Given Default)
  • Alternatives to traditional ratings
Financial Statement Techniques for Credit Risk Analysis
  • The importance of sustainable cash flow; cash flow measures of leverage
  • Key drivers of cash flow for utilities and non-utility energy providers
  • Commodity price sensitivity and its effects on the financial statements
  • The relationship between regulatory accounting and financial accounting
  • GAAP earnings versus free cash flow
  • Implications of positive or negative free cash flow in the sectors
Break

Credit Implications of Corporate Structure
  • Mini-Cases: The corporate structure, capitalization and business profiles of an electric utility, an independent power producer, and a holding company
The Structure of Corporate Bonds and Bank Agreements (Case Study)
  • Ownership structure of the utility and its relationship to credit
  • Capital structure and major types of debt
  • Holding company groups and parent/subsidiary relationships

Lunch

Evaluating Credit Risk of Counterparties
Guest Speaker: Donna McMonagle, Director of Credit Risk, NRG Energy 

  • Sources of counterparty exposure in normal commercial transactions
  • Measuring counterparty exposures
  • Calculating expected losses
  • Setting limits on unsecured exposures
  • The environment of counterparty credit management
Break

Energy Trading Risk and Derivatives Exposure
  • Overview of how hedging is used
  • Risks in energy trading 
  • Interpreting derivatives disclosures
Liquidity Analysis
  • Sources of internal and external liquidity
  • Capital expenditures, internal and external funding sources
  • Commodity exposure, energy trading markets and liquidity
5:00 pm

Day One concludes

8:00 am

DAY TWO - Thursday, October 17

Continental Breakfast open
8:15 am

Program begins

Review of Day One

Financial Analysis: Ratio Analysis (Case Study); Valuation Approaches
  • Best practices in use of financial ratios in the power and gas sector
  • Peer company analysis
  • Case Study: Analyzing credit ratios, comparing ratios against comparable peers and rating agency target ratios
Qualitative Analysis/Management Strategy and Experience
  • Consideration of different factors affecting outlook for a regulated and competitive entities
  • Evaluation of management effectiveness
  • Effect of other business related functions on outlook
Break

Insolvency, Bankruptcy, and Recovery
  • Insolvency and consequences
  • The primary drivers of bankruptcy and insolvency in the sectors
  • The bankruptcy and reorganization process
  • Recovery experience and recovery analysis for utilities and gencos
  • Case Study: Bankruptcies and reorganizations of a utility and a competitive generator; contrasting methods of bankruptcy valuation and recovery by creditors
Warning Signals; Developing Your Own Forward Credit View
  • Regulated utilities
  • GenCos and non-regulated energy providers
  • Holding companies
  • Symptoms of deteriorating credit standing: financial, non-financial and market indicators
Sector Outlook, Conclusions, Group Exercise and Discussion
  • Consolidating multiple analyses to develop a comprehensive assessment of an institution's creditworthiness
  • Combining the qualitative and quantitative analysis for a credit analysis
  • Quantitative and market-based alternatives for credit ratings
  • The credit implications of emerging issues
  • Group Exercise: Students will use what has been learned during the course to develop a credit view of a real case company.
12:30 pm

Program concludes

Hotel and Seminar Information
This two-day seminar will be held at the hotel listed below. The seminar will start promptly at 7:30 AM and will finish at 5:00 PM on the first day. On the second day, the seminar will resume at 8:00 AM and will finish at 12:30 PM. Your registration includes all conference materials and continental breakfast on both days, plus lunch on the first day. Dress is business casual.
COVID 19 Information: Please click here for the PGS Covid-19 policy. You can confirm each hotel's specific COVID 19 policy using the link(s) provided below.
Registration Fee and Discounts
The price for this comprehensive two-day seminar is $1,695 (USD).
Register online or Call (843) 212-4038.
  • Additional attendees and government employees receive a 10% discount.
  • Register 4 or more attendees and receive 20% Off. Special pricing is available for groups of 5 or more.
    If you want attendees to pay with separate credit cards or have other questions, please call (843) 212-4038 for assistance.
Payments and Cancellations
Payment is due prior to the start of the seminar by Visa, Master Card, American Express, or corporate check. Seminar fees will be charged to your credit card at the time of registration unless other arrangements have been made. Please make checks payable to "PGS Energy Training" 26 Teal Lane • Hilton Head Island, SC 29926. Cancellations will result in a credit that is good for 2 years which can be transferred to a colleague. Substitutions may be made at any time. For more information on PGS policies regarding administrative matters and complaint resolution, please contact our offices at (843) 212-4038.
CPE Credits in Specialized Knowledge

This live group seminar is eligible for 12.5 CPE credits. Be aware that state boards of accountancy have final authority on the acceptance of individual courses for CPE credit. As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accept one-half credits.

PGS Energy Training is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org. CPAs interested in attending any seminars should contact our offices for details on CPE credits granted and any prerequisite requirements.
PGS Energy Training is registered with GARP as an Approved Provider of Continuing Professional Development (CPD) credits. If you are a Certified FRM or ERP, please record this activity in your Credit Tracker at http://www.garp.org/cpd. Please inform PGS Energy Training that you are a GARP CPE participant upon seminar registration.

The Global Association of Risk Professionals (GARP) is a not-for-profit membership association dedicated to preparing professionals and organizations for making better-informed risk decisions. GARP's membership represents more than 150,000 risk management practitioners and researchers at academic institutions, banks, corporations, government agencies, and investment management firms in 195 countries and territories. GARP administers the Financial Risk Manager (FRM) and Energy Risk Professional (ERP) Exams – certifications recognized by risk professionals worldwide. Visit www.garp.org/cpd.
Who Should Attend

Business/ Corporate Development, Financial Planning and Analysis, and Corporate Finance/ Treasury professionals at power and gas companies

Professionals in investment banking, project finance, asset management, hedge funds, or equity/fixed income research

Consultants, accountants and lawyers who advise power and gas clients on infrastructure projects,Current and potential suppliers or professionals looking for an understanding of how projects are structured in order to bolster their service offerings

Prerequisites and Advance Preparation

This fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar.

Why Choose PGS?

PGS in Partnership with SNL Energy seminars are known for their clear explanations and in-depth content. Register today, and join the energy professionals who have already attended one of these proven programs.

Program Level & Delivery Method
Intermediate level. CPE delivery method is "Group-Live."