Hi guys! Currently interviewing for a lending position. The next step is to build ~6 pages pitch suggesting how to finance a certain project (TLA, TLB, bonds, mezzanine, equity, etc) so I would like to know what structure you should recommend to me. I found this one on the forum (I made some tweaks): 1) Cap structure recommendation (including uses and sources) 2) Company profile (including current debt capitalization, debt maturities, org chart, etc) 3) Financials: P&L, CF projections, covenant analysis and stress scenarios 4) Recovery analysis (also called hurdle analysis by BIWS) for downside risk discussion 5) Debt comps? (if bonds are suggested) 6) Term sheet proposal Any help is appreciated!
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Based on the most helpful WSO content, here's a detailed structure for your credit pitch:
Capital Structure Recommendation
Company Profile
Financials
Recovery Analysis
Debt Comparables
Term Sheet Proposal
This structure should provide a comprehensive and detailed pitch for your lending position interview. Good luck!
Sources: https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1, Private Credit Resources and Prep, How to Prepare for Restructuring Technical Questions, Distressed publicly traded credit - case study help needed!, 6 Things to Consider in Structuring a Term Sheet for IB
Strengths, Risks and Mitigants are the longest part of every credit memo
where’s the EV analysis? implied in the recovery?
Do you have an example of a credit memo?
I haven't seen Enterprise Value analysis on credit pitches. I wouldn't say that it's implied on recoveries. They tend to focus on cap structure, covenant analysis, debt capacity, and term sheet proposals. I found a few examples here (focused on acquisition finance):
https://www.sec.gov/Archives/edgar/data/1592016/000114036122046530/ny20006083x2_ex99c2.htm
https://www.sec.gov/Archives/edgar/data/1633651/000119312520066868/d874077dex99c31.htm
https://www.sec.gov/Archives/edgar/data/51548/000114036119014777/nc10002999x2_exc-12.htm
https://www.sec.gov/Archives/edgar/data/1513965/000119312519117158/d733891dex99c6.htm
Your links don't work FYI.
Why would you lend to someone without knowing what it was worth?
I updated the links
Exactly. If you wanted to provide a mortgage to a homeowner, would you do it without knowing the value of the house? No.
How would you know the value of your recovery in a waterfall analysis if you didn’t know the value to be recovered?
For S/RMs, you aren’t going to find good examples. I remember seeing a Lehman/Tishman memo years ago (CRE focus), that might have what you need. Otherwise write up top 3 strengths, then top 3 risks and 3-4 mitigating factors to each risk
this case study is clearly for an experienced position at AN/AS level. DM me if you need guidance but with all due respect, might be for someone with a few years under their belt
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