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Debt Management

Structuring and managing the organization's short and long-term debt.
Level 1 Introductory: Demonstrates introductory understanding and ability and, with guidance, applies the competency in a few, simple situations. Can direct people to the appropriate source for further information.

BEHAVIORS

  • Describes how the debt structure works.
  • Explains debt covenants, their calculation, use and meaning.
  • Identifies debt reporting obligations, including content and timing, and the importance of timely and accurate reporting to debtholders.

QUESTIONS

  • Tell me about a time when you had to calculate debt covenant ratios

Probing Questions

* What was the circumstance?

* Which ratios did you calculate?

* Where did you get the information?

* What was the result?

  • Tell me about a time when you were involved in gathering information for reporting to debtholders or banks.

Probing Questions

* What information were you collecting?

* Where did you get the information?

* What was the time period involved?

* What was the result?

Level 2 Basic: Demonstrates basic knowledge and ability and, with guidance, can apply the competency in common situations that present limited difficulties.

BEHAVIORS

  • Identifies the basic criteria needed to evaluate investment information resources (e.g., credibility, risk factors, rating services).
  • Prepares basic debt compliance reporting in accordance with the organization’s debt arrangements.
  • Communicates basic assessments of rating structures.

QUESTIONS

  • Tell me about a time when you prepared debt compliance reporting, either internally or to debtholders.

Probing Questions

* Who was your audience?

* What information did you prepare?

* Where did you get the information?

* How did you present the report?

  • Describe a time when you participated in investment or debt evaluation.

Probing Questions

* What were you evaluating?

* What was your role in the evaluation?

* What information did you consider?

* What did you recommend?

Level 3 Intermediate: Demonstrates solid knowledge and ability, and can apply the competency, with minimal or no guidance, in the full range of typical situations. Would require guidance to handle novel or more complex situations.

BEHAVIORS

  • Ensures funds are appropriately sourced for maturities.
  • Prepares complex debt compliance reporting in accordance with the organization’s debt arrangements.
  • Prepares materials for external security analysis.
  • Conducts regular debt portfolio reviews and analysis.
  • Ensures ongoing compliance with regulatory requirements.

QUESTIONS

  • Describe a time when you prepared materials for external security analysis.

Probing Questions

* What materials were you preparing?

* What was your audience?

* Where did you get the information?

* What did you present to the stakeholders?

  • Tell me about a time when you made recommendations for debt renewal or retirement.

Probing Questions

* What were the circumstances?

* How did you arrive at your recommendation?

* What resources did you use?

* How did you communicate your recommendation?

Level 4 Advanced: Demonstrates advanced knowledge and ability and can apply the competency in new or complex situations. Guides other professionals.

BEHAVIORS

  • Structures the company's short-term debt.
  • Manages external debt and inter-company loans.
  • Monitors compliance with debt covenants.
  • Ensures payments are made punctually and informs the relevant stakeholders.
  • Monitors plans for acquisitions, divestitures and joint ventures to ensure the organization will not go into default.

QUESTIONS

  • Tell me about a time when you developed a new system for monitoring debt compliance or making payments.

Probing Questions

* What were your role and responsibilities?

* How was the requirement for a new system defined?

* How did you determine what information to collect?

* How did you structure the new system?

  • Describe a time when your analysis determined that a proposed transaction would create a debt default.

Probing Questions

* What were your role and responsibilities?

* How did you determine that a debt default was possible?

* What information did you consider?

* How did you communicate the results of your analysis?

Level 5 Expert: Demonstrates expert knowledge and ability, and can apply the competency in the most complex situations. Develops new approaches, methods or policies in the area. Is recognized as an expert, internally and/or externally.

BEHAVIORS

  • Leverages information about all the relationships and strategies around short and long-term debt management plans.
  • Identifies, negotiates and maintains appropriate debt facilities with lending institutions.
  • Manages the relationship with debt rating agencies to ensure an appropriate rating is granted and maintained.
  • Develops plans to mediate any debt management issues, current or anticipated.

QUESTIONS

  • Tell me about a time when you negotiated a significant new or revised debt arrangement.

Probing Questions

* What were your role and responsibilities?

* What was the circumstance?

* How did you go about the negotiation?

* How did you deal with issues during the negotiation?

  • Describe a time when you interacted with a debt rating agency to ensure the appropriate rating was granted to your organization.

Probing Questions

* What were your role and responsibilities?

* What was the circumstance?

* How did you approach the interaction?

* How did you deal with issues raised?