The apparent complexity that has crept in every sphere
of financial domain has mandated institution of robust review mechanism to keep
track of the discrepancies. Such discrepancies, if gone unnoticed, can throw
the operational framework off the track bringing about unprecedented loss. Structured finance review is one such
audit instrument to validate the health and efficiency of asset quality and
associated spectrum.
Overview
of structured review
The review program is tailored for clients who wish to
assess the asset quality of targeted entities involving business development
companies, specialty finance companies, commercial institutions, and leasing
agencies.
Areas
covered
The specialized fields that fall within the ambit of structured finance review includes
middle market non investment grade leveraged finance, commercial real estate
finance classified in the domains of conventional and non conventional, asset
dependent lending, and cash flow enterprise value lending. The classification
of assets is broadly done at the senior and subordinate debt level across
industry wide categories.
Implementation
Experienced senior bankers are at the helm of
structured review program. Such bankers possess significant amount of exposure
at senior
or executive level management and have commendable expertise in designing and
implementing structured finance. The review carries out assessment of the
adequacy and reliability of the credit and investment risk rating system, loan
approving mechanism, loan monitoring framework, underwriting, efficiency of
loan and credit administration, and legal documentation. It also attempts to
check the sufficiency of asset valuations and specific loan loss reserves.
Specialized checks are done with regards to special purpose vehicles discharging
role as conduits through items that involve testing of payment application,
cash collections, servicer report, reviewing borrower base, information
systems, corporate governance and true sale accounting.
Report
mechanism
The structured finance review program is tailored to
suit the client’s requirements optimally. The agency executing the review will
prioritize the actions accordingly for rapid turnaround time. The ambit of
activities to fall under the review will be decided upon in consultation with
the client. The structuring of review is done in a manner that will facilitate
fast delivery of written report soon after completion of the onsite review
process. The report will comprehensively cover the findings of the review. It
will include the observations and conclusions in summarized version. A written
report for each type of loan and investment reviewed will underpin the
findings.
Structured finance review is a robust mechanism to be
exercised diligently for ascertaining the overall health of a financial
institution. Banks should exercise this option diligently to plug any loopholes
that might have crept in inadvertently in the loan review, approval, monitoring
and other related financial activities.
CEIS Structured Finance
Review programs are customized to the client's needs and each assignment is
prioritized for a quick turnaround time. Find more information to http://www.ceisreview.com/pages/Services/2/125/Structured_Finance_Review
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