What's corporate credit investing?
Hello, everyone. I recently searched a job position which belongs to corporate credit group. I want to know what corporate credit investing different from fixed-income/corporate bond research investing. Thank you for your insights.
My understanding of the lingo, used on the job (these may not match the "book" definitions)
Corporate = businesses. This is in contrast to municipal.
Fixed Income = usually refers to bonds. At all the places I'm aware of that exclusively call themselves "fixed income" investors, I've never seen them invest in loans. Likewise, at larger asset managers that have a separate "fixed income" group, I think the focus is on bonds
Credit = a broader term that could refer to bonds and/or loans. A "credit" investor. A "credit" asset manager could be referring to any debt instrument.
Not exactly.
- Corporate is correct, refers to any business (could be domestic/international/EM).
- Fixed Income is the broadest term, it refers to any instrument that gives payments on a fixed schedule (this could be bonds, loans, converts, etc).
- Credit refers to any debt instrument that has some type of credit risk (for example, you would not consider US Treasuries "credit"). If someone is on the "credit desk" that likely means they research and invest in corporate bonds/loans
To answer OP's question, corporate credit investing and fixed-income/corporate bond research investing are likely the same.
Thank you so much for your insight!
Looks like the only definition we disagree on is fixed income. That was the term I was referring to when I said that the lingo may not match the book definition. I understand fixed income refers to "fixed" payments and can therefore be really any debt instrument. However, fixed income "groups" or "research" or "job" usually only invests in bonds. Loans are less liquid instruments so not all asset managers can invest in loans. Maybe my observation comes from there simply being more bond investors in the world than loan investors? Either way, in terms of how firms identify themselves, I've observed that lenders that have the capacity to go into loans will usually refer to themselves as credit investors in order to distinguish themselves from "fixed income" which may paint a picture of bonds only to LPs.
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