Credit analysis is a type of financial analysis undertaken by direct lenders, credit analysts, and Debt Capital Markets professionals with an emphasis on assessing a company’s ability (and its management’s willingness) to service debt obligations into the future. A borrower receives a risk grade, which corresponds to its probability of default. Credit structuring, a core tenant of credit analysis, is the art and science of using covenants, loan terms, and collateral security (among other things) to mitigate loan loss, in the event of a financial default.