Loan Capital Markets Resources
There seem to be no good resources on loan capital markets. I was lucky to get a little taste of it during my summer internship, and it seems like an interesting gig. My understanding is this: You work for a bank, credit hedge fund, CLO, pension fund, etc., and you buy into tranches of corporate term loans and revolvers. Diligence seems to be similar to what an equity research analyst might do, just with much more emphasis on credit metrics of course, like DSC, FCCR, and so on. I feel like this realm of credit should be talked about more, it is super niche and fascinating (at least to me). Would love to hear your guys' thoughts on LCM and why there might be a lack of resources for students wanting to learn more about this field. Thanks!
Based on the most helpful WSO content, here are some insights and thoughts on Loan Capital Markets (LCM) and the potential reasons for the lack of resources:
Insights on Loan Capital Markets (LCM):
Work Environment:
Diligence Process:
Niche and Fascinating Field:
Potential Reasons for Lack of Resources:
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Industry Focus:
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Suggestions for Learning More:
Internships and Networking:
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For more detailed resources, you might want to explore the WSO's financial modeling resources, Excel resources, and various interview prep courses available on their platform.
Sources: Why do people care so much about their alma mater?, Former MS M&A / KKR here to field questions, Why is everyone obsessed with equity L/S, Dear Undergrads and Highschoolers, https://www.wallstreetoasis.com/forum/investment-banking/systemic-oppression-of-non-target-students?customgpt=1
"You work for a bank, credit hedge fund, CLO, pension fund etc." - the type of work you do will heavily depend on which seat you're in. If you're at a bank with a BS then you can underwrite across the capital stack (1L, 2L, DDTLs, revolvers etc.) and then syndicate, or in the case of MM/leveraged loans you're likely acting as placement agent. If you're at a CLO manager or credit fund, then you're diligencing/buying said assets and placing them into different funds/vehicles for your LPs and clipping fees. And there your traditional pension funds/FoF that invest into these funds and CLOs etc. that are looking at the underlying collateral as well as the managers to assess risk-adjusted returns.
FWIW I think more people are interested in companies/equities because its more operations-oriented and fundamental (i.e. you're looking at a business rather than a capital structure, unless you're in distressed). Credit folks are generally going to be more interested in protecting downside for consistent 12% returns rather than chasing a 35% IRR, hence the overwhelmingly more resources for PE.
Hey! Could I PM you? I have a quick question regarding LCM
Cheers :)
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