FILE 1 OF 6 · THE CALL
A builders' merchant asks to lift its overdraft from US$1.5m to US$2.5m on the back of sales up 25%. The relationship manager suggests leaving the price where it is, to keep them happy.
// THE IN-TRAY / CHAPTER 16 FILES · ONE MINUTE EACH
THE IN-TRAY · CHAPTER 1 OF HOW BANKERS THINK
6 files on The Three Questions
The question this chapter answers: What is every credit decision actually deciding?
Make a call on any file and every option opens with how far it sits from the senior banker’s read. There is no score.
FILE 2 OF 6 · THE CALL
A rival bank offers your borrower a margin 50 basis points below yours on a five-year term loan: same security, same covenants. The borrower is sound and wants an answer this week.
What do you check before deciding whether to match?
FILE 3 OF 6 · THE CALL
A five-year loan to a single-site manufacturer. No financial covenants. Security is specialised plant that only a handful of buyers could use. The credit is strong today.
Which question has the file left open?
FILE 4 OF 6 · THE CALL
Two US$3m requests land the same morning. One borrower's cash flow covers the debt comfortably, but the only security is stock. The other offers a first mortgage over land worth twice the loan, with cash flow that barely covers the interest.
Which file is stronger?
FILE 5 OF 6 · THE FIRST QUESTION
A distributor wants a US$4m term loan to buy a competitor. Its plan shows the combined business repaying the loan in four years.
Which assumption do you test first?
FILE 6 OF 6 · THE CALL
A borrower of fifteen years, never late, asks for a covenant waiver after one bad quarter. The new numbers are weak but explained. The deadline is tomorrow.
What is the senior move?
6 FILES · PICK A CALL ON ANY OF THEM
// THE WHOLE TRAY
The placement draws three files from each of the eight chapters and ends in a card of where you read from.
START THE PLACEMENT →// THE OTHER SEVEN
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