Q.

2 Given Wellfleets new focus on large corporate deals and its need to
recruit relationship managers from investment banks, what are the challenges for the risk culture of the organization and its style of risk management in particular?

Challenges for the risk culture are: To educate sales people To develop risk models that enable them to make informed decision about what is the appropriate level of return they ought to get for the risk they take They are strongly focused to enlarge transformational deals with clients. It is very profitable business for the bank. Risk culture of the organization works as a circle of Credit Committee, clients and client relationship managers who directly contact each other and understand their needs to find better profitable solution for both side.

Style of risk management No surprise culture for Wellfleet in their style of risk management to board of director and top management.

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Purpose Requested amount Credit strength

Explanation
To finance the proposed acquisition of Zellmont $850 million -World largest steel maker with 6% of global steel prodution -Diversified revenue based -High level of raw material integration -Good financial performance Integration risk Complex debt structure Possible failure of hostile take over Political risk high of Zellmont

Credit challenge

The purpose of preparing the proposal from Ashar Industries is to finance the proposed acquisition of Zellmont by $850 million. The credit strength of Ashar Industries are one of the world largest steel maker with 6% of global steel production, diversified revenue based, high level of raw material integration and good financial performance with comparably high EBITDA margins and free cash flow generation in 2005. Based on first proposal from Ashar Industries through credit analysis, the challenges are integration risk with the target company, need to further streamline the complex debt structure of present company, possible real break off in hostile takeover and possible political risk of Zellmonte.

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Explanation

Purpose
Requested amount

To refinance (GGC) $1 billion 2.375% convertible bond due February 2009

$1.0 billion

Credit strength

-The worlds 3rd largest gold producer with 7% of global gold production. -Diversified production base. -Low cost producer - Need to refinance $1.0 billion convertible bond due to expire on 27 February 2009 -Total debt to EBITDA was 800% in 2007. -Debt protection: EBIT to interest expense was -3.1% in 2007

Credit challenges

The purpose of Gatwick Gold Corporation is to refinance $1 billion 2.375% convertible bond due February 2009. GGC is the worlds 3rd largest gold producer with 7% of global gold production. Other credit strength from GGC are diversify the production base and low cost producer. According credit analysis for second proposal from Gatwick Gold Corporation, the challenges that facing by Wellfleet are need to refinance $1.0 billion convertible bond due to expire on 27 February 2009, total debt to Earnings Before Interest, Taxes, Depreciation, And Amortization (EBITDA) was 800% in 2007 and the debt protection of Earnings Before Interest And Taxes (EBIT) to interest expense was -3.1% in 2007.