corporate-credit-memo

Original source / Raw SKILL.md

---
name: corporate-credit-memo
version: 1.0.0
description: >
  Generates institutional-grade corporate credit application memoranda (Credit Memos) in English
  from uploaded annual reports, financial statements, or user-provided financial data.
  Use this skill whenever a user wants to produce a bank credit memo, credit application,
  lending assessment, due diligence report, borrower analysis, or loan approval document —
  whether for general corporate lending, bilateral loans, club deals, or syndicated facilities.
  Also triggers for requests like "analyse this company for a loan", "write up a credit paper",
  "prepare a credit committee memo", "assess this borrower", or "draft a credit application
  for [company name]". Designed for banking professionals including credit analysts, relationship
  managers, risk officers, and CROs. Applies UK/international banking standards with awareness
  of PRA supervisory expectations.
homepage: https://github.com/henrijoe20/corporate-credit-memo
tags:
  - finance
  - banking
  - credit
  - due-diligence
  - risk
metadata:
  clawdbot:
    emoji: "🏦"
    requires:
      env: []
    files: ["references/*", "assets/*"]
# Security manifest:
# Environment variables accessed: none
# External endpoints called: web search only (read-only)
# Local files read: references/credit-memo-structure.md, references/financial-ratios.md,
#                   references/risk-framework.md, assets/disclaimer.md
# Local files written: output .docx only
# No shell execution, no API keys required
---

# Corporate Credit Memo Skill

Produces full institutional-grade Credit Application Memoranda (20–30+ pages) from uploaded
financial documents and user-provided deal parameters. Output follows the 8-section structure
used by major international banks, with all financial ratios calculated and flagged where data
is insufficient.

---

## Step 1 — Intake & Clarification

When triggered, immediately check what the user has provided. Do NOT ask multiple questions
at once. Follow this sequence:

### 1a. Check for uploaded files
If annual reports / financial statements are attached → proceed to Step 2.
If nothing is attached, ask:
> "Please upload the company's annual reports (last 2–3 years, PDF or Word). If you don't
> have them, paste the key financials and I'll work with those."

### 1b. Collect deal parameters (ask once, in a single message)
Once files are confirmed, ask the user to confirm or provide:

```
1. Borrower legal name
2. Facility type & amount (e.g. GBP 50m term loan / USD 120m revolving credit)
3. Tenor (e.g. 3 years, 5 years)
4. Purpose of loan (working capital / capex / refinancing / acquisition)
5. Security / guarantee structure (if known)
6. Repayment profile (bullet / amortising / quarterly)
7. Pricing (if known — e.g. SONIA + 250bps)
8. Lending bank / branch name
9. Any internal policy or industry classification to reference?
   (If unsure, leave blank — I will note it as [TO BE CONFIRMED])
```

Tell the user:
> "Items marked [TO BE CONFIRMED] will be flagged in the report for your team to complete —
> including RAROC, internal limits, and any policy-specific thresholds."

---

## Step 2 — Document Extraction

Read all uploaded files carefully. Extract and organise:

**From financial statements (P&L, Balance Sheet, Cash Flow):**
- 3 years of annual data + latest interim period if available
- All line items needed for ratio calculation (see `references/financial-ratios.md`)
- Auditor name and opinion type (unqualified / qualified / emphasis of matter)
- Reporting currency and any FX translation notes

**From the annual report narrative:**
- Business description, segment breakdown, revenue mix
- Key customers and suppliers (concentration risk)
- Management team and ownership structure
- Geographic footprint
- Material litigation, contingent liabilities, off-balance-sheet items
- ESG disclosures if present

**Flag clearly** any data that is:
- Missing → label `[DATA NOT AVAILABLE — please provide]`
- Restated vs prior year → note the restatement
- Unaudited → label `[UNAUDITED]`

---

## Step 3 — Research (Web Search)

Use web search to supplement document data for:
- Industry overview: market size, growth rate, cycle positioning
- Regulatory / policy environment relevant to the borrower's sector
- Competitive landscape: 2–3 named peers with approximate market share
- Recent news on the company (last 12 months): M&A, rating actions, management changes
- Macroeconomic context relevant to the jurisdiction and sector

Do NOT fabricate specific figures. If web search returns insufficient data, note:
> "[Industry data limited — recommend analyst review / Bloomberg supplement]"

---

## Step 4 — Calculate Financial Ratios

Read `references/financial-ratios.md` for all formulas and flag logic.

Calculate every ratio for each available year. Apply the following flag rules:
- ✅ Calculated successfully → show figure
- ⚠️ Calculated but at borderline threshold → show figure + note
- 🔲 Data insufficient → show `[N/A — data required]`
- 📋 Requires internal input → show `[TO BE CONFIRMED — internal policy]`

RAROC and internal capital allocation are always `[TO BE CONFIRMED]`.
DSCR denominator must match the proposed repayment schedule — confirm with user if unclear.

---

## Step 5 — Draft the Credit Memo

Read `references/credit-memo-structure.md` for the full 8-section structure and
content requirements for each section.

### Drafting principles:
- Write in formal institutional English — consistent with major UK/international bank standards
- Tone: analytical, direct, no marketing language
- Every material statement should be traceable to either the uploaded documents or web search
- Clearly distinguish facts from analytical judgements
- Use tables for all financial data — never prose for numbers
- Section headers must match the structure in `references/credit-memo-structure.md` exactly
- Flag all `[TO BE CONFIRMED]` items inline — do not omit them or leave blank
- Do not invent internal policy figures (hurdle rates, limits, RWA) — always flag these

### Risk section (Section 6):
Read `references/risk-framework.md` before drafting.
Assign a risk rating (Low / Medium / High) for each risk category with a one-line rationale.
This section reflects the analytical approach expected of a senior risk function,
consistent with PRA supervisory expectations for credit risk governance.

### Disclaimer:
Append the standard disclaimer from `assets/disclaimer.md` at the end of every report.

---

## Step 6 — Output as Word Document (.docx)

Generate the final report as a formatted .docx file using the docx skill conventions:
- Font: Arial throughout
- Colour scheme: dark navy headers (#1F4E79), mid-blue subheadings (#2E75B6)
- All financial tables: dark navy header row, alternating white/light-blue rows
- Info tables (deal terms, company details): two-column label/value format
- Risk rating boxes: colour-coded text (green=Low, amber=Medium, red=High)
- Page header: "Credit Application Memorandum | Confidential — Internal Use Only"
- Page footer: document date + page number
- Cover page: borrower name, facility type, amount, date, classification label

Present the .docx file to the user when complete.
Also offer a brief verbal summary of the key credit highlights and top 3 risks.

---

## Quality Checklist (run before presenting output)

Before finalising, verify:
- [ ] All 3 years of financials extracted and populated in tables
- [ ] Every ratio in `references/financial-ratios.md` either calculated or flagged
- [ ] No internal policy figures invented (RAROC, RWA, limits)
- [ ] Risk section has a rating for each of the 7 categories
- [ ] All [TO BE CONFIRMED] items visible and not hidden
- [ ] Disclaimer appended
- [ ] Document is .docx format, not markdown

---

## Handling Edge Cases

**Listed company:** Extract financials from uploaded annual report. Use web search for
stock performance context and peer comparison. Note exchange and ticker.

**Unlisted / private company:** Flag absence of public ratings. Rely on audited accounts.
Note that valuation of pledged equity (if any) requires independent appraisal.

**Holding company borrower / SPV:** Distinguish between holdco and opco financials.
Analyse guarantor separately. Note structural subordination risk.

**Insufficient financials (only 1 year available):** Complete what is possible.
Note that trend analysis is limited and recommend additional data before credit approval.

**Chinese-language source documents:** Extract data from tables regardless of language.
For narrative sections, translate key disclosures as needed. Note source language.

**M&A / acquisition finance:** Produce pro-forma combined financials. Separate target
and acquirer analysis. Reference `references/credit-memo-structure.md` Section 1 addendum
for transaction analysis structure.


---

## Referenced Files

> The following files are referenced in this skill and included for context.

### references/financial-ratios.md

```markdown
# Financial Ratios Reference

All ratios to be calculated for each available financial year.
Apply flag rules from SKILL.md Step 4 for every ratio.

Currency unit: match the borrower's reporting currency throughout.
All ratios expressed as stated below (x = multiple, % = percentage, days = integer).

---

## 1. LEVERAGE & SOLVENCY

| Ratio | Formula | Unit | Ideal Direction | Flag if |
|---|---|---|---|---|
| Total Debt / EBITDA | (Short-term debt + Long-term debt) / EBITDA | x | Lower | > 4.0x — flag ⚠️ |
| Net Debt / EBITDA | (Total debt - Cash) / EBITDA | x | Lower | > 3.5x — flag ⚠️ |
| Gearing Ratio | Total Debt / Total Equity | x | Lower | > 2.0x — flag ⚠️ |
| Debt-to-Assets | Total Liabilities / Total Assets | % | Lower | > 70% — flag ⚠️ |
| Equity Ratio | Total Equity / Total Assets | % | Higher | < 25% — flag ⚠️ |

**Calculation notes:**
- Total Debt = short-term borrowings + current portion of long-term debt + long-term debt
- Exclude trade payables and deferred revenue from debt
- Cash = cash and cash equivalents only (exclude restricted cash)
- If EBITDA is negative, mark all EBITDA-based ratios `[N/A — negative EBITDA]`

---

## 2. DEBT SERVICE & COVERAGE

| Ratio | Formula | Unit | Minimum | Flag if |
|---|---|---|---|---|
| Interest Coverage (ICR) | EBIT / Net Interest Expense | x | > 2.0x | < 2.0x — flag ⚠️ |
| EBITDA / Interest | EBITDA / Gross Interest Expense | x | > 3.0x | < 2.5x — flag ⚠️ |
| DSCR | EBITDA / (Interest + Scheduled Principal) | x | > 1.20x | < 1.20x — flag ⚠️ |
| Fixed Charge Cover | EBITDA / (Interest + Rent + Scheduled Principal) | x | > 1.10x | < 1.10x — flag ⚠️ |

**DSCR calculation note:**
> ⚠️ The denominator (annual debt service) must reflect the proposed repayment
> schedule under THIS facility. If the facility repayment schedule is not yet confirmed,
> use total interest expense from the most recent year as a proxy and note:
> "[DSCR denominator is indicative — confirm against final repayment schedule]"
>
> Historical DSCR (using existing debt service) and pro-forma DSCR (including this
> facility) should both be shown where data allows.

---

## 3. LIQUIDITY

| Ratio | Formula | Unit | Minimum | Flag if |
|---|---|---|---|---|
| Current Ratio | Current Assets / Current Liabilities | x | > 1.0x | < 1.0x — flag ⚠️ |
| Quick Ratio | (Current Assets - Inventory) / Current Liabilities | x | > 0.8x | < 0.7x — flag ⚠️ |
| Cash Ratio | Cash & Equivalents / Current Liabilities | x | > 0.2x | < 0.1x — flag ⚠️ |
| Net Working Capital | Current Assets - Current Liabilities | GBP/USD m | Positive | Negative — flag ⚠️ |

---

## 4. PROFITABILITY

| Ratio | Formula | Unit | Direction | Notes |
|---|---|---|---|---|
| Gross Margin | Gross Profit / Revenue | % | Higher | Compare to industry |
| EBITDA Margin | EBITDA / Revenue | % | Higher | Compare to industry |
| EBIT Margin | EBIT / Revenue | % | Higher | |
| Net Profit Margin | Net Profit / Revenue | % | Higher | |
| Return on Equity (ROE) | Net Profit / Average Total Equity | % | Higher | Use average of start/end year equity |
| Return on Assets (ROA) | Net Profit / Average Total Assets | % | Higher | |
| Return on Capital Employed (ROCE) | EBIT / (Total Assets - Current Liabilities) | % | Higher | Preferred for capital-intensive businesses |

---

## 5. OPERATIONAL EFFICIENCY

| Ratio | Formula | Unit | Direction | Notes |
|---|---|---|---|---|
| Days Sales Outstanding (DSO) | (Trade Receivables / Revenue) × 365 | Days | Lower | Rising trend = collection risk ⚠️ |
| Days Inventory Outstanding (DIO) | (Inventory / Cost of Sales) × 365 | Days | Lower | Rising trend = obsolescence risk ⚠️ |
| Days Payable Outstanding (DPO) | (Trade Payables / Cost of Sales) × 365 | Days | Higher = better for borrower | Very high DPO may signal liquidity stress |
| Cash Conversion Cycle (CCC) | DSO + DIO - DPO | Days | Lower | CCC > 90 days = elevated working capital risk |
| Asset Turnover | Revenue / Average Total Assets | x | Higher | Declining = efficiency deterioration |

---

## 6. CASH FLOW QUALITY

| Ratio | Formula | Unit | Direction | Notes |
|---|---|---|---|---|
| Cash Conversion (OCF / Net Profit) | Operating Cash Flow / Net Profit | x | Should be ≥ 0.8x | <0.5x = aggressive accruals / earnings quality risk ⚠️ |
| Capex / Revenue | Capex / Revenue | % | Context-dependent | High for capex-intensive industries |
| Capex / Depreciation | Capex / D&A | x | >1.0x = growth investment | <0.5x = underinvestment risk |
| Free Cash Flow Yield | FCF / Total Debt | % | Higher | Negative FCF — flag ⚠️ |

**FCF = Operating Cash Flow - Capex**

---

## 7. PRO-FORMA RATIOS (POST-FACILITY)

Calculate the following on a pro-forma basis assuming full drawdown of the proposed facility:

| Ratio | Formula | Basis |
|---|---|---|
| Pro-forma Net Debt / EBITDA | (Existing net debt + New facility) / LTM EBITDA | LTM EBITDA |
| Pro-forma Total Debt / EBITDA | (Existing total debt + New facility) / LTM EBITDA | LTM EBITDA |
| Pro-forma DSCR | LTM EBITDA / (Total annual debt service incl. new facility) | Proposed repayment schedule |
| Pro-forma Gearing | (Total debt post-facility) / Equity | Latest balance sheet |

Note: Pro-forma ratios assume no other changes to the balance sheet.
If proceeds are used to refinance existing debt, adjust denominator accordingly.

---

## 8. RATIO PRESENTATION FORMAT

In the credit memo, present ratios in a single summary table (Section 3.4):

| Metric | FY[N-2] | FY[N-1] | FY[N] | LTM | Pro-forma | Benchmark |
|---|---|---|---|---|---|---|
| — Leverage — | | | | | | |
| Net Debt / EBITDA | | | | | | < 3.5x |
| Total Debt / EBITDA | | | | | | < 4.0x |
| Gearing | | | | | | < 2.0x |
| Debt-to-Assets | | | | | | < 70% |
| — Coverage — | | | | | | |
| EBIT / Interest (ICR) | | | | | | > 2.0x |
| EBITDA / Interest | | | | | | > 2.5x |
| DSCR | | | | | 📋 | > 1.20x ⚠️ confirm |
| — Liquidity — | | | | | | |
| Current Ratio | | | | | | > 1.0x |
| Quick Ratio | | | | | | > 0.8x |
| — Profitability — | | | | | | |
| Gross Margin % | | | | | | Industry avg |
| EBITDA Margin % | | | | | | Industry avg |
| Net Margin % | | | | | | |
| ROE % | | | | | | |
| ROA % | | | | | | |
| — Efficiency — | | | | | | |
| DSO (days) | | | | | | |
| DIO (days) | | | | | | |
| DPO (days) | | | | | | |
| CCC (days) | | | | | | < 90 days |
| — Cash Flow — | | | | | | |
| OCF / Net Profit | | | | | | ≥ 0.8x |
| FCF (GBP/USDm) | | | | | | Positive |

Legend: ✅ = satisfactory | ⚠️ = borderline / watch | 🔴 = breach | 🔲 = data unavailable | 📋 = requires internal input

```

### references/credit-memo-structure.md

```markdown
# Credit Memo Structure Reference

Full 8-section structure for Corporate Credit Application Memoranda.
All section headers and sub-headers must appear exactly as shown below.

---

## COVER PAGE

Fields to populate:
- Document title: "Credit Application Memorandum"
- Borrower legal name (large, centred)
- Facility type and amount
- Lending bank / branch
- Date
- Classification: "CONFIDENTIAL — FOR INTERNAL USE ONLY"

Summary box (cover table):
| Field | Value |
|---|---|
| Lending Bank | |
| Borrower | |
| Facility Type | General Corporate Loan (Term) |
| Amount | |
| Tenor | |
| Primary Purpose | |
| Security | |
| Industry | |
| Date | |

---

## SECTION 1 — REQUEST & BACKGROUND

### 1.1 Facility Overview
Narrative paragraph summarising the credit request. Must include:
- Who is borrowing, from whom, how much, for what purpose
- Tenor and repayment structure
- Key security / guarantee

Then an info table:
| Parameter | Detail |
|---|---|
| Facility Type | |
| Amount | |
| Tenor | |
| Purpose | |
| Repayment Source | |
| Security / Collateral | |
| Repayment Profile | |
| Pricing | |
| Lender | |

### 1.2 Relationship Overview & Strategy
- Length and nature of banking relationship
- Existing credit limits and utilisation
- Group / parent strategic client status
- Estimated annual revenue to the bank (fees + NII)
- Strategic rationale for this facility

Info table:
| Field | Detail |
|---|---|
| Relationship Since | |
| Existing Credit Limit | |
| Current Utilisation | |
| Group Level Relationship | |
| Estimated Annual Revenue | |
| Key Products / Services | |

### 1.3 Industry Policy Compliance
- Industry classification under internal credit policy
- Acceptance status: Supported / Restricted / Excluded
- Table comparing key policy thresholds vs borrower actuals

| Policy Metric | Requirement | Borrower Actual | Compliant? |
|---|---|---|---|
| Leverage ratio | | | |
| Revenue threshold | | | |
| Credit rating | | | |
| Environmental compliance | | | |
| Other (sector-specific) | | | |

Note: If internal policy thresholds are not provided by user, mark entire column
`[TO BE CONFIRMED — internal credit policy]`

### 1.4 Transaction Analysis (M&A / Acquisition Only)
Include this sub-section only when the facility is for acquisition finance.
- Why is the buyer acquiring? Strategic rationale.
- Why is the seller selling?
- Valuation basis (EV/EBITDA, DCF, comparable transactions)
- Synergies and integration plan
- Post-acquisition pro-forma capitalisation table
- Key conditions precedent and regulatory approvals required

---

## SECTION 2 — BORROWER OVERVIEW

### 2.1 Company Profile
Info table:
| Field | Detail |
|---|---|
| Legal Name | |
| Registered Office | |
| Incorporation Date | |
| Registered Capital | |
| Company Registration No. | |
| Listed / Unlisted | |
| Stock Exchange & Ticker | (if listed) |
| Auditor | |
| Audit Opinion | Unqualified / Qualified / [specify] |
| Website | |

Company description (2–3 sentences): core business, key products/services, geographic
presence, industry positioning.

### 2.2 Ownership Structure & Ultimate Beneficial Owner
Table of shareholders:
| Shareholder | Ownership % | Nature | Notes |
|---|---|---|---|
| | | State / Corporate / Individual | UBO if applicable |
| Total | 100% | | |

UBO narrative: Who ultimately controls the borrower? Any cross-shareholding, golden share,
or special voting rights? Any pledged shares that could affect control?

### 2.3 Group Structure & Key Subsidiaries
| Subsidiary | Ownership % | Business | Contribution to Group |
|---|---|---|---|

Note any significant off-balance-sheet entities, JVs, or VIE structures.

### 2.4 Management Team
| Name | Title | Tenure | Background Summary |
|---|---|---|---|

Flag any recent management changes, succession risk, or key person dependency.

### 2.5 Business Segments & Products
| Segment | Key Products / Services | Revenue Share | Gross Margin |
|---|---|---|---|

Customer concentration: top 5 customers, combined revenue share, largest single customer %.
Supplier concentration: top 5 suppliers, procurement concentration, pricing power assessment.

### 2.6 Industry Position & Competitive Landscape
Market overview: size (GBP/USD bn), 3-year CAGR, structural drivers, cyclical positioning.

| Competitor | Market Share | Listed? | Key Differentiator vs Borrower |
|---|---|---|---|
| [Peer A] | | | |
| [Peer B] | | | |
| Borrower | | | |

Industry position narrative: ranking, competitive moat, key risks to market position.

---

## SECTION 3 — FINANCIAL ANALYSIS

Opening note (always include):
> "Financial data extracted from audited annual reports for FY[N-2], FY[N-1], FY[N]
> and [unaudited / management accounts] for [latest interim period].
> Auditor: [name]. Opinion: [unqualified / qualified — specify]. Currency: [GBP/USD/CNY]m."

### 3.1 Income Statement
Table — rows: Revenue, YoY Growth, Cost of Sales, Gross Profit, Gross Margin %,
SG&A, R&D (if applicable), EBITDA, EBITDA Margin %, D&A, EBIT, Net Interest Expense,
EBT, Tax, Net Profit, Net Margin %.
Columns: FY[N-2], FY[N-1], FY[N], LTM / Latest Interim.

Analysis paragraphs (2–3 sentences each):
- Revenue trend and key drivers
- Margin trajectory and cost structure commentary

### 3.2 Balance Sheet
Table — rows: Cash & Equivalents, Trade Receivables, Inventory, Total Current Assets,
PP&E (net), Intangibles & Goodwill, Total Assets, Short-term Debt, Trade Payables,
Total Current Liabilities, Long-term Debt, Total Liabilities, Shareholders' Equity,
Minority Interest.
Columns: FY[N-2], FY[N-1], FY[N], Latest Period.

Analysis paragraphs:
- Asset quality (receivables ageing, inventory provisioning, goodwill impairment risk)
- Liability structure (short vs long-term debt split, covenant headroom if disclosed)

### 3.3 Cash Flow Statement
Table — rows: Operating Cash Flow (OCF), Investing Cash Flow, Capex, Free Cash Flow (FCF),
Financing Cash Flow, Net Change in Cash.
Columns: FY[N-2], FY[N-1], FY[N], LTM.

Analysis paragraphs:
- OCF quality (OCF / Net Profit ratio = cash conversion)
- Capex plans and self-funding capacity

### 3.4 Key Financial Ratios Summary
Full ratio table — read `references/financial-ratios.md` for all formulas and categories.
Columns: FY[N-2], FY[N-1], FY[N], LTM, Benchmark / Comment.

Always include the footnote:
> "⚠️ DSCR denominator is based on proposed annual debt service under this facility.
> Confirm repayment schedule before finalising. RAROC requires internal capital model input
> — marked [TO BE CONFIRMED] throughout."

### 3.5 Financial Analysis Summary
Paragraph format (not bullet points for this section):
- Strengths: 2–3 items
- Areas of concern: 2–3 items with mitigants

---

## SECTION 4 — INDUSTRY & MACRO ANALYSIS

### 4.1 Macroeconomic Environment
Jurisdiction-relevant macro context: GDP growth, interest rate trajectory, FX considerations,
inflation. Impact on borrower's business model.

### 4.2 Industry Dynamics
Demand drivers, supply-side dynamics, pricing trends, technological disruption risks.
Cycle positioning: Expansion / Peak / Contraction / Recovery.

### 4.3 Regulatory & Policy Environment
| Policy / Regulation | Summary | Impact on Borrower |
|---|---|---|

---

## SECTION 5 — FACILITY STRUCTURE & TERMS

### 5.1 Sources & Uses
| Use of Proceeds | Amount (GBP/USD m) | % | Notes |
|---|---|---|---|
| | | | |
| Total | | 100% | |

| Source of Funds | Amount | % |
|---|---|---|
| This facility | | |
| Equity / own cash | | |
| Other | | |
| Total | | 100% |

### 5.2 Term Sheet Summary
Info table (all fields):
| Parameter | Detail |
|---|---|
| Lender | |
| Borrower | |
| Amount | |
| Tenor | |
| Availability Period | |
| Interest Rate | |
| Repayment | |
| Commitment Fee | |
| Arrangement Fee | |
| Security | |
| Financial Covenants | See 5.4 |
| Conditions Precedent | |
| Governing Law | |
| Dispute Resolution | |

### 5.3 Security Structure
| Security Type | Provider | Asset / Scope | Estimated Value | Coverage Ratio |
|---|---|---|---|---|
| Mortgage / Charge | | | | |
| Share Pledge | | | | |
| Corporate Guarantee | | | | |
| Personal Guarantee | | | | |

Security commentary: title clarity, priority ranking, enforceability assessment,
liquidity discount for non-cash collateral.

### 5.4 Financial Covenants
| Covenant | Proposed Threshold | Test Frequency | Notes |
|---|---|---|---|
| Leverage (Net Debt / EBITDA) | ≤ [x]x | Semi-annual | |
| Interest Cover (EBIT / Interest) | ≥ [x]x | Semi-annual | |
| DSCR | ≥ 1.20x | Annual | ⚠️ Confirm threshold |
| Gearing ratio | ≤ [x]% | Semi-annual | |
| Minimum liquidity | ≥ [GBP/USD Xm] | Monthly reporting | |
| Capex restriction | As agreed | Annual | |
| Restriction on disposals | >X% of net assets requires consent | — | |
| Cross-default | Standard | — | |

Note: All covenant thresholds marked ≤/≥ [x] are indicative. Confirm with credit
approvers and borrower before inclusion in facility agreement.

### 5.5 Repayment Analysis
Primary repayment source: operating cash flow — analysis of FCF coverage of debt service.
Secondary repayment source: asset disposal / refinancing / sponsor support — credibility
assessment.

---

## SECTION 6 — RISK ANALYSIS & MITIGANTS

Opening paragraph: brief statement of overall risk assessment approach.

For each risk category below, provide:
1. Risk rating box: **[LOW / MEDIUM / HIGH]** — one-line rationale
2. Risk description: 2–3 sentences
3. Mitigants: 2–3 bullet points

### 6.1 Credit Risk
### 6.2 Industry & Market Risk
### 6.3 Operational Risk
### 6.4 Legal & Compliance Risk
### 6.5 Collateral Risk
### 6.6 Concentration & Group Risk
### 6.7 ESG Risk

### 6.8 RAROC & Internal Return Analysis
Info table:
| Parameter | Value |
|---|---|
| Proposed Loan Rate | |
| Commitment / Arrangement Fees (annualised) | |
| Estimated Annual Revenue to Bank | |
| Risk-Weighted Assets (RWA) | [TO BE CONFIRMED — internal model] |
| RAROC (post-tax) | [TO BE CONFIRMED — internal model] |
| Internal Hurdle Rate | [TO BE CONFIRMED — internal policy] |
| Pricing vs Hurdle | [TO BE CONFIRMED] |

Note always:
> "RAROC calculation requires internal capital allocation model inputs and PD/LGD
> parameters from the credit risk system. This section must be completed by the
> credit risk / finance team before submission to credit committee."

---

## SECTION 7 — POST-LENDING MONITORING

### 7.1 Reporting & Information Covenants
| Report | Frequency | Provider | Content |
|---|---|---|---|
| Management accounts (unaudited) | Quarterly, within 45 days of period end | Borrower | P&L, B/S, KPIs |
| Audited annual accounts | Annually, by 31 March | Borrower | Full statutory accounts |
| Compliance certificate | Semi-annual | CFO sign-off | Covenant calculations |
| Material event notification | Within 5 business days of occurrence | Borrower | Litigation, management change, major contract |
| Security valuation | Annual | Independent valuer | Updated collateral value |

### 7.2 Account & Cash Flow Monitoring
Detail any account monitoring requirements: primary operating account, designated
collection account, cash sweep mechanisms.

### 7.3 Early Warning Indicators & Acceleration Triggers
| Category | Warning Signal | Proposed Action |
|---|---|---|
| Financial | Two consecutive covenant metric deteriorations of >[X]% | Trigger review; request explanation |
| Operational | Revenue decline >[X]% YoY | On-site review; stress repayment analysis |
| Credit | External rating downgrade below [X] | Assess cross-default; accelerate if material |
| Collateral | Pledged equity value drop >[X]% | Demand top-up collateral or partial prepayment |
| Legal | Enforcement action / entry to insolvency register | Immediate legal preservation steps |

---

## SECTION 8 — RECOMMENDATION & APPROVAL

### 8.1 Summary Assessment
| Assessment Dimension | Rating / Conclusion | Key Basis |
|---|---|---|
| Borrower Credit Quality | [Investment Grade / Sub-IG / Unrated] | |
| Industry Outlook | [Positive / Neutral / Cautious] | |
| Financial Health | [Strong / Adequate / Weak] | |
| Security Coverage | [Adequate / Thin / Unsecured] | |
| Overall Risk Rating | [Low / Medium-Low / Medium / Medium-High / High] | |
| Industry Policy Compliance | [Yes / Conditional / No] | See Section 1.3 |

### 8.2 Recommendation
Clear statement: Approve / Approve subject to conditions / Decline.

If conditional approval:
| No. | Condition Precedent / Special Requirement | Deadline |
|---|---|---|
| 1 | | [Prior to drawdown] |
| 2 | | |

### 8.3 Approving Officer Sign-Off
Fields:
- Relationship Manager: _______________
- Credit Analyst: _______________
- Senior Credit Officer / CRO: _______________
- Date: _______________
- Credit Committee reference: _______________

Space for credit committee decision and comments.

---

## APPENDICES

### Appendix A — Financial Projections (Optional)
3-year forward projections with stated assumptions.
Flag clearly: "Projections based on management plan / analyst estimates.
Subject to material uncertainty. For indicative purposes only."

### Appendix B — Stress Testing (Optional)
| Scenario | Key Assumption | EBITDA Impact | Net Leverage | DSCR | Can Service Debt? |
|---|---|---|---|---|---|
| Base | Current trajectory | | | | Yes |
| Mild stress | Revenue -10% | | | | |
| Severe stress | Revenue -25%, margins -5pp | | | | Marginal |
| Extreme | Revenue -40% | | | | No — security activated |

### Appendix C — Due Diligence Checklist
| No. | Document | Status | Notes |
|---|---|---|---|
| 1 | Audited accounts (3 years) | | |
| 2 | Latest management accounts | | |
| 3 | Certificate of incorporation | | |
| 4 | Constitutional documents | | |
| 5 | Ownership / shareholding register | | |
| 6 | Evidence of use of proceeds | | |
| 7 | Title deeds / security documents | | |
| 8 | Material contracts / key customer agreements | | |
| 9 | Credit bureau / bank reference check | | |
| 10 | Court / enforcement search results | | |
| 11 | Tax compliance certificate | | |
| 12 | Environmental / regulatory compliance | | |

### Appendix D — Information Sources
List all sources used: uploaded documents, web search results, databases referenced.

```

### references/risk-framework.md

```markdown
# Risk Assessment Framework

For use in Section 6 of the Credit Application Memorandum.
Reflects senior credit risk analytical standards consistent with PRA supervisory
expectations for credit risk governance in UK-regulated institutions.

---

## Risk Rating Scale

| Rating | Definition | Typical Indicators |
|---|---|---|
| **LOW** | Risk is well-mitigated or not material to repayment capacity | Strong mitigants, no material exposure, within appetite |
| **MEDIUM** | Risk is present and requires monitoring; does not threaten near-term repayment | Partial mitigants, manageable exposure, within policy limits |
| **HIGH** | Risk is material and could impair repayment capacity under stress | Weak mitigants, significant exposure, warrants heightened scrutiny or covenant protection |

Assign one rating per category. Do not use "LOW-MEDIUM" or similar — choose the
higher rating when in doubt.

---

## 6.1 Credit Risk

**What to assess:**
- Borrower's financial capacity to service and repay the facility
- Quality of earnings (sustainable vs one-off), cash flow reliability
- Leverage trajectory (improving / stable / deteriorating)
- Historical debt service record (any defaults, restructurings, covenant breaches)
- Probability of default based on financial ratios

**Key questions:**
- Can the borrower service debt from operating cash flow in a mild downturn?
- Is leverage trending in the right direction?
- Are there any disclosed credit events (covenant waivers, rating downgrades)?

**Mitigants to reference:**
- Security structure and coverage ratio
- Covenant package and frequency of testing
- Monitoring and reporting requirements
- Guarantor support if applicable

---

## 6.2 Industry & Market Risk

**What to assess:**
- Cyclicality of the industry and current cycle position
- Structural headwinds or tailwinds (technological disruption, decarbonisation, regulation)
- Revenue concentration risk (customer / geography / product)
- Pricing power and ability to pass through cost inflation
- Competitive dynamics: number of players, barrier to entry, margin pressure

**Key questions:**
- How would a 20–30% revenue decline (sector stress) affect debt service capacity?
- Is the borrower a price-maker or price-taker?
- Are there any structural threats to the business model (e.g. EV disruption for ICE auto suppliers)?

**Mitigants to reference:**
- Diversification of revenue streams
- Long-term contracts with take-or-pay provisions
- Borrower's competitive position and market share

---

## 6.3 Operational Risk

**What to assess:**
- Geographic concentration of production / operations
- Key person dependency (founders, single CEO/CFO)
- Supply chain vulnerability (single-source suppliers, import dependency)
- IT / cyber resilience (material for financial institutions or tech-dependent businesses)
- Labour relations and workforce stability
- Insurance adequacy

**Key questions:**
- What would a 3-month operational disruption (fire, flood, cyber) do to cash flows?
- Is there succession planning for key executives?
- Are critical inputs dual-sourced?

---

## 6.4 Legal & Compliance Risk

**What to assess:**
- Material litigation: quantum, probability of adverse outcome, provisioning adequacy
- Regulatory breaches: fines, licence suspension risk, enforcement actions
- Anti-money laundering / sanctions screening results
- Environmental permits and compliance history
- Tax disputes and contingent liabilities
- IP ownership and infringement risk (for technology / pharma borrowers)
- Cross-border legal risks (governing law, enforceability of security)

**Key questions:**
- Are there any unresolved legal matters that could materially affect net assets?
- Does the borrower operate in sanctioned jurisdictions or have sanctioned counterparties?
- Is the security package enforceable in the relevant jurisdiction?

**For cross-border transactions (especially China-related entities):**
- Note SAFE/NDRC/MOFCOM approval requirements where applicable
- Note enforceability of offshore security over onshore assets
- Note VIE structure risks if present

---

## 6.5 Collateral Risk

**What to assess:**
- Nature of collateral: liquid (cash, marketable securities) vs illiquid (real estate, equipment)
- Valuation methodology and date of last independent appraisal
- Priority of charge: first-ranking vs subordinated
- Encumbrances: any existing mortgages, pledges, or liens that reduce coverage
- Enforceability: legal process for realising security in the relevant jurisdiction
- Value volatility: market / cyclical risk affecting collateral value

**LTV considerations by asset type:**
| Collateral Type | Typical Max LTV | Notes |
|---|---|---|
| Investment-grade bonds / listed equities | 70–80% | Mark-to-market; daily margin call ability |
| Prime commercial real estate | 60–70% | Illiquid; valuation lag |
| Residential property | 70–75% | Jurisdiction-specific |
| Industrial / specialist property | 50–60% | Limited pool of buyers |
| Unlisted company shares | 30–50% | Valuation uncertainty; forced sale discount |
| Trade receivables (assigned) | 70–85% | Depends on debtor quality and ageing |
| Equipment / plant | 40–60% | Depreciation; specialist resale market |

**Key questions:**
- Has an independent valuation been obtained within the last 12 months?
- Is the bank's charge properly registered and first-ranking?
- Can the bank enforce the security without borrower cooperation?

---

## 6.6 Concentration & Group Risk

**What to assess:**
- Single-name concentration: is this borrower already large relative to sector or portfolio limits?
- Group interconnections: intra-group loans, cross-guarantees, upstream dividends
- Contagion risk: could financial distress in a related entity trigger default here?
- Related-party transactions: scale, pricing, commercial rationale
- Cash pooling or centralised treasury arrangements that may impede access to borrower cash

**Key questions:**
- If the parent / group encounters difficulties, what is the mechanism of contagion to this borrower?
- Are intra-group transactions at arm's length and documented?
- Does the borrower have operational and financial independence from the group?

---

## 6.7 ESG Risk

**What to assess:**

*Environmental:*
- Carbon intensity of the business and trajectory vs net-zero targets
- Physical climate risk (flood, drought, extreme weather) to assets or supply chain
- Regulatory transition risk (carbon pricing, emissions standards)
- Environmental permits: any breaches, pending enforcement, remediation liabilities
- Alignment with bank's own ESG / climate commitments

*Social:*
- Labour practices: disputes, health & safety record, living wage compliance
- Supply chain labour standards (relevant for manufacturing, retail, food)
- Community impact of operations
- Data privacy and cybersecurity obligations

*Governance:*
- Board independence and composition
- Audit committee effectiveness
- Quality and transparency of financial reporting
- Related-party oversight mechanisms
- Management incentive alignment with creditor interests

**ESG flag triggers (always note if present):**
- Company is in a high-carbon sector (energy, mining, steel, cement, airlines)
- Material ESG controversy in last 24 months (environmental incident, governance scandal)
- Borrower has no published sustainability report or disclosures
- Operations in jurisdictions with elevated ESG / human rights concerns

---

## Risk Summary Table Format

Present at the start of Section 6:

| Risk Category | Rating | One-Line Rationale |
|---|---|---|
| 6.1 Credit Risk | [LOW/MEDIUM/HIGH] | |
| 6.2 Industry & Market Risk | [LOW/MEDIUM/HIGH] | |
| 6.3 Operational Risk | [LOW/MEDIUM/HIGH] | |
| 6.4 Legal & Compliance Risk | [LOW/MEDIUM/HIGH] | |
| 6.5 Collateral Risk | [LOW/MEDIUM/HIGH] | |
| 6.6 Concentration & Group Risk | [LOW/MEDIUM/HIGH] | |
| 6.7 ESG Risk | [LOW/MEDIUM/HIGH] | |
| **Overall Risk Assessment** | **[LOW/MEDIUM/HIGH]** | Weighted view |

Overall rating = highest of individual ratings, unless mitigants across the board
justify a composite view one notch lower. Do not average ratings mechanically.

```

### assets/disclaimer.md

```markdown
# Standard Disclaimer

Append verbatim to the end of every Credit Application Memorandum produced by this skill.

---

**IMPORTANT DISCLAIMER**

This Credit Application Memorandum ("Memo") has been prepared using the Corporate Credit
Memo AI Skill, which draws on uploaded financial documents, publicly available information,
and web research to assist banking professionals in structuring credit analysis.

This Memo is intended solely for internal credit review and approval purposes by authorised
personnel of the lending institution. It does not constitute a binding credit commitment,
investment recommendation, or regulatory opinion.

**The following items are explicitly excluded from this Memo and must be completed
by the lending institution's credit and risk teams before submission to credit committee:**

- RAROC and internal return calculations (require internal capital allocation model)
- Risk-weighted asset (RWA) calculations
- Internal credit rating / probability of default (PD) assignment
- Compliance with institution-specific credit policy thresholds
- Final financial covenant levels (require credit approver sign-off)
- Legal enforceability of security (requires legal counsel review)
- Regulatory reporting classifications

**Data reliance:** Financial data has been extracted from documents uploaded by the user.
The accuracy of extracted data depends on the quality and completeness of source documents.
All figures marked [UNAUDITED] or [MANAGEMENT ACCOUNTS] have not been independently verified.

**Web research:** Industry, macroeconomic, and competitive information sourced via web
search is provided in good faith but may not be current or complete. Users should verify
material facts independently.

**No regulatory advice:** Nothing in this Memo constitutes advice on PRA/FCA regulatory
requirements, Basel capital adequacy, IFRS 9 provisioning, or any other regulatory matter.
Senior Management Function (SMF) holders and other regulated persons remain personally
responsible for all regulated activities and decisions.

**Confidentiality:** This document contains confidential information. Distribution is
restricted to authorised recipients only. Do not share externally without appropriate
redaction and approval.

---

*Generated by Corporate Credit Memo Skill | For internal use only*
*All [TO BE CONFIRMED] items must be resolved before credit committee submission*

```



---

## Skill Companion Files

> Additional files collected from the skill directory layout.

### README.md

```markdown
# 🏦 Corporate Credit Memo

**Generate institutional-grade Credit Application Memoranda from annual reports — in minutes.**

Built by a bank CRO with PRA Senior Management Function (SMF4) certification.
Designed for credit analysts, relationship managers, risk officers, and CROs at banks
and financial institutions.

---

## What it does

Upload a company's annual report (PDF or Word) and provide basic deal parameters.
The skill produces a full **20–30 page Credit Application Memorandum** in English,
formatted as a `.docx` file ready for credit committee review.

The output follows the 8-section structure used by major international banks:

| Section | Content |
|---|---|
| 1. Request & Background | Facility overview, relationship summary, industry policy compliance |
| 2. Borrower Overview | Company profile, ownership, management, business segments, competitive position |
| 3. Financial Analysis | 3-year P&L / B/S / Cash Flow tables + 28 financial ratios, all calculated |
| 4. Industry & Macro | Market dynamics, regulatory environment, cycle positioning |
| 5. Facility Structure | Sources & uses, term sheet summary, security structure, covenants |
| 6. Risk Analysis | 7-category risk assessment (Credit, Market, Operational, Legal, Collateral, Group, ESG) |
| 7. Post-Lending Monitoring | Reporting covenants, early warning indicators, account monitoring |
| 8. Recommendation | Summary assessment, approval recommendation, conditions precedent |

Plus appendices: financial projections, stress testing, DD checklist.

---

## What you need to provide

**Required:**
- Annual report(s) — PDF or Word, last 2–3 years
- Facility type and amount (e.g. GBP 50m term loan)
- Loan tenor and purpose
- Repayment structure

**Optional (skill will flag as [TO BE CONFIRMED] if not provided):**
- Security / guarantee details
- Pricing (e.g. SONIA + 250bps)
- Internal policy thresholds
- Lending bank / branch name

---

## What it will never fabricate

The skill is designed with strict discipline on items that require internal bank input:

- ❌ **RAROC** — always marked `[TO BE CONFIRMED — internal model]`
- ❌ **Risk-Weighted Assets (RWA)** — always marked `[TO BE CONFIRMED]`
- ❌ **Internal credit policy thresholds** — flagged if not provided
- ❌ **PD / LGD parameters** — always flagged for credit risk team
- ❌ **Internal credit ratings** — never assigned without user input

All `[TO BE CONFIRMED]` items are visible inline in the document — nothing is hidden or omitted.

---

## Financial ratios calculated (28 total)

**Leverage & Solvency:** Net Debt/EBITDA, Total Debt/EBITDA, Gearing, Debt-to-Assets, Equity Ratio

**Coverage:** ICR (EBIT/Interest), EBITDA/Interest, DSCR, Fixed Charge Cover

**Liquidity:** Current Ratio, Quick Ratio, Cash Ratio, Net Working Capital

**Profitability:** Gross Margin, EBITDA Margin, EBIT Margin, Net Margin, ROE, ROA, ROCE

**Efficiency:** DSO, DIO, DPO, Cash Conversion Cycle, Asset Turnover

**Cash Flow Quality:** OCF/Net Profit, Capex/Revenue, Capex/Depreciation, FCF Yield

**Pro-forma:** Net Debt/EBITDA post-facility, DSCR post-facility

All ratios include flag logic: ✅ healthy / ⚠️ borderline / 🔴 breach / 🔲 data unavailable.

---

## Handles these borrower types

- ✅ Listed companies (A-share, H-share, LSE, NYSE)
- ✅ Unlisted / private companies
- ✅ Holding companies and SPV borrowers
- ✅ Chinese-language source documents (data extracted regardless of language)
- ✅ M&A / acquisition finance (with transaction analysis section)
- ✅ Single year of accounts available (with appropriate caveats)

---

## Output format

- `.docx` Word document, formatted for credit committee presentation
- Navy/blue colour scheme with professional table formatting
- Cover page with deal summary box
- Page headers and footers
- Standard disclaimer appended to every report

---

## Disclaimer

Every report includes a hardcoded disclaimer clarifying:
- This is an internal credit review tool, not a regulatory opinion
- RAROC and internal capital figures must be completed by the bank's risk team
- SMF holders remain personally responsible for all regulated decisions
- Data accuracy depends on uploaded source documents

---

## Skill structure

```
corporate-credit-memo/
├── SKILL.md                          ← Main skill (triggers + workflow)
├── README.md                         ← This file
├── references/
│   ├── credit-memo-structure.md     ← Full 8-section report structure
│   ├── financial-ratios.md          ← 28 ratio formulas + flag logic
│   └── risk-framework.md            ← 7-category risk assessment framework
└── assets/
    └── disclaimer.md                ← Standard disclaimer (appended to all reports)
```

---

## Install

```bash
clawhub install corporate-credit-memo
```

Or search "credit memo" on [clawhub.ai](https://clawhub.ai).

---

## Feedback & improvements

Issues and suggestions welcome via GitHub Issues.
If you use this in production and have improvements to the structure or ratio logic,
pull requests are appreciated.

---

*Built with institutional banking standards in mind. Not a substitute for professional
credit judgement or regulatory compliance review.*

```

### _meta.json

```json
{
  "owner": "henrijoe20",
  "slug": "corporate-credit-memo",
  "displayName": "Corporate Credit Memo",
  "latest": {
    "version": "1.0.0",
    "publishedAt": 1772749938003,
    "commit": "https://github.com/openclaw/skills/commit/5e7c21d0457a0e2ea8c46fbbbd08ad948c742147"
  },
  "history": []
}

```