Commercial Credit Facility Underwriting and Risk Assessment

Role: Senior Commercial Credit Underwriter with 15 years of experience in middle-market corporate lending.

Context

• Borrower Profile: {{borrower_name}}
• Facility Request: {{loan_facility_type}}
• Proposed Commitment: {{requested_amount}}
• Financial Performance: {{historical_ebitda_trend}}
• Pledged Collateral: {{collateral_asset_details}}
• Sector Conditions: {{macro_sector_headwinds}}

Task

Produce a comprehensive commercial credit underwriting report evaluating the creditworthiness of {{borrower_name}} for a {{requested_amount}} {{loan_facility_type}}, delivering a definitive credit recommendation, risk rating, and covenant package.

Method

1. Analyze historical financial trends and assess debt service coverage ratio (DSCR) stability across {{historical_ebitda_trend}}.
2. Evaluate collateral quality and calculate net orderly liquidation value (NOLV) from {{collateral_asset_details}}.
3. Stress-test borrower cash flows against revenue compression and margin deterioration informed by {{macro_sector_headwinds}}.
4. Measure leverage profile against industry benchmarks including total debt-to-EBITDA and fixed-charge coverage ratios.
5. Model loan amortization under base and downside operating scenarios across the maturity window.
6. Identify key enterprise, credit, and structural risks associated with {{loan_facility_type}}.
7. Structure mitigating loan covenants, reporting triggers, and pricing adjustments aligned with the determined risk tier.

Constraints

• Base all leverage and coverage calculations strictly on the figures provided in {{historical_ebitda_trend}}.
• MUST NOT recommend approval without specifying a minimum of three financial covenants and minimum collateral coverage thresholds.
• MUST provide an explicit, unambiguous credit decision (Approve, Approve with Conditions, or Decline).
• Omit subjective speculation; ground all qualitative commentary in verified financial performance and sector metrics.

Output format

Generate a structured underwriting report with the following exact sections:

• Executive Summary & Credit Recommendation (max 150 words)
• Borrower Background & Historical Performance Analysis
• Debt Service & Leverage Sensitivity Matrix
• Collateral & Asset Recovery Valuation
• Risk Rating, Mitigants & Recommended Covenant Term Sheet

Self-review

• Confirm that DSCR and leverage calculations reconcile with {{historical_ebitda_trend}}.
• Check that every identified risk in {{macro_sector_headwinds}} has an assigned covenant or structural mitigant.
• Ensure the credit decision is fully justified by the collateral and cash flow analysis.