Project 49

Project Name

Process re-engineering & development new end-to-end underwriting & asset management platform – POLARIS

Client

Export Development Canada , Structured and Project Finance Group

Duration

January to July 2018

The Structured and Project Finance (SPF) Group is an integral part of the Corporation’s strategy to maintain a CAD 1.5 billion annual net income stream. It has been and continues to be on a growth path. The group focuses on two broad types of transactions:

1-      Large Scale Greenfield Project Financing – complex, customized, long lead time transactions.

2-      Structured Brownfield/Greenfield Infrastructure Financing – complex, tighter turnaround transactions that nonetheless require significant due diligence review (e.g. M&A transactions, PPP’s).

Significant business growth and structural re-organization changes in recent years has caused the SPF group to run above full capacity (red) on a semi-consistent basis. To support EDC 2020 growth targets, the SPF Group needs to free up capacity within the team by processing transactions (Origination & Asset Management) more effectively or efficiently.

This mandate is the phase 2 of the SPF Reengineering Underwriting Process Project. Phase 1 (see mandate 48) consisting in the assessment of current SPF processes and development of a proof of concept (PoC). The PoC was used to socialize and demonstrate the process automation concept, elicit feedback and obtain support for moving forward with this Phase 2.

In Phase 2, the objective is to implement an optimized end-to-end SPF underwriting processes supporting a transaction from its Origination up to Asset Management. Also, develop and deploy a single integration application platform providing guidance to the SPF underwriters in their due diligence and risk analysis functions in conjunction with applicable risk rating modeling. Guidance is supported by customizable cataloging library system, which is collection of due diligence consideration based on SPF team members body of knowledge. Also, due diligence considerations are corroborated against comparable Moody’s or Standard & Poor’s risk rating questions and interim score.

This is allowing underwriter to collaborate and validate coherence of their analysis in real-time as they are performing in parallel concurrently activities related to either due diligence analysis, executing sensitivity test against a financial modeling and/or assessing risk rating score.

Develop a software application platform to support the SPF underwriters in their due diligence and risk analysis functions by:

• Consolidating unstructured information access in single location
• Providing a standardized approach recognizing asset class specificities
• Quality assurance controls imbedded ensuring process completeness
• Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis
• Credit package link to Risk Rating Model (i.e. Standard & Poor’s or Moody’s)
• Providing in context on-line guidance instruction to support analysis.
• Applying Agile software development to project management processes throughout the project’s lifecycle to achieve quality, budget and schedule targets.
• Developing project implementation plans
• Seeking approval of the implementation plan by the steering committee’s
• Developing and monitoring the project risk management plan.
• Developing and tracking key performance indicators project metrics to ensure satisfactory progress.

3 key fundamental elements are introduced to the SPF Due Diligence process:

·       Create a new “single source information platform” to allow collaboration and support production of SPF deliverable.

·       Create standardization through the creation of an “on team” catalogue.

·       Propose implementation of preventive action at the data governance to address the data integrity weaknesses.

·       Enable the usage of the existing Standard & Poors or Moody’s Risk Rating Model tool “in tandem “against any specific assessment considerations. Reduce overall touch time on underwriting activities by an average of 20%, without compromising the quality of the analysis, to allow team members to achieve work-life balance, and allowing the SPF group to reach its growth objectives. Development and successful adoption of a SPF tool that integrates the risk rating methodology and the streamlined underwriting process.

·       Reporting progress of the project on an ongoing basis and at scheduled points in the project life cycle.

·       Defining project parameters such as project scope, timeline, integration, quality, risk, and cost within the project charter.

·       Producing project documents including a) Project implementation plans; and b) Project charters

·       Monitoring project risks and indicating when risk mitigation strategies identified in the risk

References:

 Carl Burlock

Senior Vice President – Financing & International Growth Capital

(613) 598-3087 – 1754

CBurlock@edc.ca

Sven List

Vice-President – Project and Structure Finance Group

(613) 598-6872

slist@edc.ca

Export Development Canada

150 Slater Street

Ottawa, Ontario |  KIA 1K3