Hi all,
My company does not currently offer a credit training program internally, but I have the option to take one from an external party. The question is, which one? I have heard that Omega Credit Training is a decent program (I know of at least one commercial bank that uses them). I also know that NYU has a program, but they do not offer distance learning (I do not live in NYC). Are there others that you would recommend who offer a distance learning option?
Thanks all!
BR
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I did one with Moody's at my BB
Don't know if its offered to the public though
I did one with Moody's at my BB
Don't know if its offered to the public though
This is online...
http://www.nyif.com/courses/prcp_3001.html
Thanks all.
Any other recommendations?
Is the ny institute of finance reputable? Any alum on WSO?
I've haven't taken any of their courses, but they look solid. They're owned by Pearson.
http://en.wikipedia.org/wiki/New_York_Institute_of_Finance
NYIF Family: Pearson Pearson Education Financial Times The Economist FTSE Group FT Business FT Press Interactive Data MergerMarket Penguin Safari
Thanks Jackcoke, that's helpful.
I would add to look and see if the programs are certified by the CFA Institute.
Credit Analysis - Good resources for learning about credit analysis? (Originally Posted: 09/27/2012)
Hi all
Has anyone got some good resources for learning about credit analysis? I have a year of IBD experience but would like to learn more about the methods used by credit funds to analyse HY bonds, leveraged loans etc.
Any materials you could send (please PM) me, or books you can recommend, would be much appreciated
Thanks
I'm about 40% of the way through S&P's Fundamentals of Corporate Credit Analysis. It gives a pretty detailed overview of corporate credit. I like it but its a pretty dry read though IMO, kind of textbook like.
Anything by Fabozzi is good for bonds etc. S&P book mentioned above is solid for a beginner. See if you can get a hold of any of the CFA material on fixed income.
Also, if you are looking at distressed at all, the Moyer book is a must read.
Second Moyer, even if you're not looking at distressed. Good background on the basics too.
Credit's a weird animal... it can kind of mean a lot of things. What you need to know kind of depends on what you want to do with your knowledge. Basically there are 2 major categories - "Real" credit and "Rating Agency," or 'Made up" credit:
If you're an upside (equity) guy, there are two inputs to your IRR equation. The first is returns in the upside case, and the second is probability of that case occuring / how much of those returns you can claim if it does. you need to understand the asset class. You need to know what the asset is worth as a functioning operating business, and what it will take to get it there. To know the second, you need to understand the capital structure, the covenants, the legal intricacies of the state of incorporation... it's a lot to know.
If you're a downside (debt) guy, you don't give a shit about the upside. Upside is you get paid back. What you care about is what you'll get paid in a worst case scenario, and how much cash you can soak up on the way down. It's more important that you understand the legal intricacies of "tranche warfare" but you also need to know the asset class... in a different way from the equity guy. You care less about what it's worth as a cohesive operating business and more about what you can liquidate the thing for. Once again, it's complex.
Distressed assets require a special breed of investor/financier - you basically have to be part debt guy and part equity guy. If you're the debt, you may end up owning the thing, and you need to understand that case before you put your money on the table. If you're the equity, you may end up losing the thing and needing to be sharp elbowed to get as much as you can.
If this is what you want to know, they post their methodology on the internet, you can look up how they analyze a given security and pretty easily build a model that will tell you what proceeds will be at different ratings. Go to their websites and make an account and you can read all their research. Actually, building RA models is probably a good excercise for you college kids. But keep in mind, this is different from "Real" credit. This is made up. By a bunch of trolls.
+SB for "Tranche Warfare", will absolutely be using that in my weekly meeting today.
great response NYCbandar. thanks. it's the "real" credit analysis that I was to learn about, at least to the stage where I can hold my own in a tier 1 credit fund interview.. you seem like you know your stuff and I know the majority is probably learned on the job, but do you have any recommended reading? Thanks again
What you need to know depends on the strategy of the fund, the biggest question is where would their investments sit in the capital structure of the asset / company, but it would also be helpful for you to give some background on the asset class, the situation, etc.
Basically, when you're playing in the distressed space, their are two potential arbs / main strategies - you can either see some hidden value that nobody else does (upside), or you can structure your capital infusion such that you tear everyone else's face off when push comes to shove (downside).
The skill set is not the same between the two.
Not purely interested in the distressed space - looking to learn about leveraged loans and HY buyside analysis in the BB+ spectrum
A Pragmatists Guide to Leveraged Finance - Kricheff Distressed Debt - Moyer
Credit Analysis - Examining companies (Originally Posted: 05/20/2011)
Hey, what would credit analysis, like examining companies to make decisions about fixed income investing, fall under?
What do you mean exactly by "fall under"? Credit analysis is really a catch-all, wide term used to define many functions that sell-side bankers and buy-side people do routinely for deals. On the banking side, LevFin and DCM groups are usually responsible for credit analysis; that is, in a nutshell, determining if, when, and how a company will be able to repay and/or refinance a certain amount of debt.
Really simple definition: This usually comprises building operating projections (which will usually come from the industry group), then looking at comparable companies to see their interest rates and capital structure and fitting a similar structure onto the company you're looking at. You'd then look at their operating projections under different scenarios (up, down, base, etc) and see what the repayment (or lack thereof) looks like by looking at different coverage and leverage ratios.
The buy-side is probably deeper, especially for leveraged stuff, because in the end, your cash is on the line.
Err, on this website. Nevermind. I kind of figured it out.
Credit Analysis - Various debt instruments (Originally Posted: 07/10/2013)
Having worked in PE I am very familiar with various debt instruments, traditional credit analysis, coverage/leverage ratios, covenants, collateral, etc. but do any of you guys work in a role that requires daily credit analysis? Can you recommend any credit analysis texts and/or provide me with a typical CA model (i.e. what a lender or rating agency would use)? I realize that this would look very similar to a traditional equity valuation or operating model but want to ensure that I am not missing anything. PM me or reply here. Thanks.
Fixed Income Analysis by Fabozzi has an entire chapter on Principles of Credit Analysis... among other great information
You are not missing anything. Models are very vanilla for fundamental credit analysis and as user above suggested, Fabozzi has a huge book on FI. If you are interested in distressed, Stephen Moyer has a great book that I am actually currently reading.
Most lenders don't run daily credit analyses. They check each company in the portfolio monthly or even quarterly.
Thanks for your responses and recommendations. PE2012, I can see why you were confused by my question as it was poorly worded but I was just seeking advice from people whose daily role requires exposure to various aspects of credit analysis as I realize that most lenders/investors in the space are clipping coupons and monitoring positions on a quarterly basis (obviously more frequently if it is a distressed situation or company is in danger of busting covenants).
If anyone is willing to share template documentation with traditional affirmative/negative covenants and coverage ratios please hit me up.
Ok, my bad. I was confused as to what you were looking for at first.
Template = typical leverage and cash flow metrics, with covenant tracking. Not much more complicated than that, really. Credit analysis is really more qualitative than anything -- better to understand every flip and switch in the CA cold than to be able to model out cash flow with BS assumptions.
Risk analysis in rating agencies tends to fall under templates that focus on a variety of ratios, coverage being the most important, and then a large set of industry specific metrics.
Valuation models are typically pretty vanilla discounted CF models where modeling sensitivities and getting to the correct discount rate tends to be the heart of the analysis.
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