How does modeling work in LevFin banking?
I'm currently a college sophomore and I've taken an interest in leveraged finance investment banking. I've seen multiple model templates (like the LevFin credit-focused 3-statement models that would be used for the bank's internal underwriting approval screens), but none of the templates I've seen had many sections for actual assumptions.
I understand how the models work mechanically (i.e. I know the different forms of debt and how the debt schedule feeds through the statements, I know how to check that the key leverage ratios are populating correctly, etc.), but I guess I don't understand where you'd typically get your drivers. For example, on one of the templates the income statement had rows to break out revenue by business segment, but there was no pre-built section where you'd build out detailed (or really any) assumptions/drivers to calculate those top-line numbers.
I know that for sponsor deals, the client would often have assumptions or maybe even an entire model to give you. But what if they don't, or what about when the client is a regular company? And when you make your "downside" case, are you just arbitrarily lowering free cash flow to see what it'd look like? Or are you making a formal revenue build?
I also know that some LevFin groups are more markets/execution-focused and don't do much modeling at all; I'm not really talking about these teams.
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