EXPOSURE AT DEFAULT (EAD) | UNDRAWN EXPOSURE & CCF FACTOR | 18

Welcome to Rajat Kumar – Credit Risk & Banking 🚀 *WHAT IS EXPOSURE AT DEFAULT (EAD) IN CREDIT RISK?* Is EAD video mein hum *Exposure at Default (EAD)* ko fundamentals se practical implementation tak samjhenge. A common mistake in credit risk is to assume that **EAD = today's outstanding loan balance**. But that is not always true. For example, a borrower may have ₹55 million currently drawn against a ₹100 million working capital facility. If 60% of the undrawn amount is expected to be utilized before default, the estimated EAD becomes *₹82 million* — not ₹55 million. In this video, I explain why this difference matters and how *Drawn Exposure + Undrawn Commitment + Credit Conversion Factor (CCF)* come together to estimate EAD. We will also connect EAD with *PD, LGD and Expected Credit Loss (ECL)* and implement the complete basic EAD calculation workflow in **Python**. Resource Link : https://github.com/rajatkumar0308/CRE... 🔍 *WHAT YOU WILL LEARN:* 👉 What is Exposure at Default (EAD)? 👉 Why EAD is different from current outstanding balance 👉 Drawn Exposure vs Undrawn Commitment 👉 What is Credit Conversion Factor (CCF)? 👉 How CCF is estimated using borrower behavior 👉 EAD calculation with numerical examples 👉 EAD for Term Loans vs Revolving Facilities 👉 EAD in Working Capital Facilities 👉 Credit Card utilization and EAD 👉 Utilization increase during financial stress 👉 Liquidity Sequence Effect 👉 EAD and Expected Credit Loss (PD × LGD × EAD) 👉 EAD Case Study for an SME borrower 👉 Common EAD modeling mistakes and red flags 👉 Facility terms, cancellation rights and legal considerations 👉 EAD framework and stress testing 👉 Portfolio-level EAD calculation 👉 EAD calculation using Python 👉 Facility-level and portfolio-level EAD metrics 🎯 *WHO SHOULD WATCH THIS?* ✅ Credit Risk Analysts ✅ Credit Risk Modelers ✅ Banking & BFSI Professionals ✅ Data Scientists working in Banking ✅ Risk Analytics Professionals ✅ Students preparing for Credit Risk / Banking Analytics roles ✅ CFA & FRM aspirants ✅ Professionals learning PD, LGD, EAD & ECL ✅ Anyone interested in Credit Risk Modeling using Python ⏱️ *TIMESTAMPS:* 00:00 – Introduction to EAD & Credit Risk Life Cycle 00:56 – Why Exposure at Default Is Important 03:10 – Core Components of EAD 04:16 – Credit Conversion Factor (CCF) Explained 05:23 – EAD Concept Check 05:53 – EAD Across Different Credit Products 07:08 – Term Loans, Revolving Facilities & Credit Cards 08:10 – What Is CCF? 10:24 – Numerical EAD Example 10:55 – Working Capital Facility EAD Calculation 12:11 – EAD Calculation & Banking Applications 12:43 – Why Utilization Can Rise Before Default 14:25 – Liquidity Sequence Effect 15:01 – SME EAD Case Study 16:20 – EAD and Expected Credit Loss 16:52 – PD × LGD × EAD 17:28 – Credit Analyst EAD Dashboard 18:36 – EAD Common Mistakes & Red Flags 20:22 – EAD from Banker, Analyst, CFO & Investor Perspective 21:56 – EAD Calculation Framework 23:27 – Key EAD Takeaways 24:36 – Understanding EAD at the Point of Default 25:09 – Introduction to Python EAD Implementation 25:50 – Creating Sample Loan Facility Data 26:22 – Calculating Undrawn Amount 26:54 – Utilization & Expected Additional Drawdown 27:31 – EAD Utilization & EAD Uplift 28:06 – Facility-Level EAD Output 28:41 – Portfolio-Level EAD Calculation 29:14 – Portfolio Metrics & Results 29:47 – Interpreting EAD Results 30:18 – EAD Python Workflow Summary 31:01 – Final EAD Insights & Conclusion 🔥 *LIKE* 👍 if this video helped you understand Exposure at Default. 🙋 *ABOUT ME:* I’m Rajat, a data scientist and senior manager with **14 years of experience in multinational banks**, working across Analytics, Credit Risk and Financial Risk. 🔗 *USEFUL PLAYLISTS:* 👉 Playlist : Python Playlist :    • Python Complete Course for Beginners 🚀 | L...   Industry level projects :    • 🏆 Real Industry Grade Banking Projects   IFRS9 & Basel Playlist :    • Credit Risk Mastery for CFA & FRM: IFRS 9,...   Credit Risk Scorecard Playlist :    • Credit Risk Analytics & Scorecard Developm...   Credit Risk Modelling Playlist :    • 📊 Credit Risk Modelling in Python | PD, LG...   Financial Risk Playlist :    • Credit Risk 2026🔥Credit Risk Management | ...   1:1 Mentorship / Career Guidance: https://topmate.io/rajat_kumar103/ Instagram :   / rajat_alt_ctrl_delete   🔑 *SEARCH QUERIES:* Exposure at Default in Credit Risk EAD Model in Credit Risk EAD Calculation EAD Model Python Credit Conversion Factor CCF CCF in Credit Risk PD LGD EAD Expected Credit Loss Credit Risk Modeling Credit Risk Analytics Banking Risk Analytics #ExposureAtDefault #EAD #CreditRisk #CreditRiskAnalytics #CreditRiskModeling #CCF #CreditConversionFactor #BankingAnalytics #ECL #PDLGDEAD #Python #RiskManagement #Banking #FinancialRisk