Hello, I am new to WSO so please bear with me as I get used to this platform.
I am in a commercial banking sales role at a mid-sized regional bank, and I also have recently obtained my CFA charter.
I am eager to move cities (preferably Chicago) for a corporate ratings role at one of the big 3 credit rating agencies (non-big 3 is fine too such as DBRS or KBRA). I would appreciate some help with making such a transition, as I recognize that there aren't many postings for non-director corporate ratings roles, but I would like to ensure that I am nimble and ready for when they do become available.
As an alternative, I do see many junior and senior analyst roles at the rating agencies but for structured finance products. I recognize that these are more distant from commercial banking compared to corporate ratings, but just out of curiosity how easy would it be to apply for those, and transition into corporate ratings once such roles become available again?
Thank you in advance for your help. Happy to join this community!
Transitioning from a Regional Commercial Banking role into a Corporate Ratings Analyst position at a credit rating agency (CRA) is a feasible move, especially with your CFA charter, which adds significant credibility to your profile. Here's how you can approach this:
1. Positioning Yourself for Corporate Ratings Roles
2. Navigating Limited Openings
3. Considering Structured Finance Roles
4. Additional Tips
By focusing on your transferable skills, networking effectively, and staying open to alternative paths like structured finance, you can position yourself for a successful transition into a corporate ratings role. Good luck!
Sources: 2017 Commercial/Corporate Banking Bonuses, Why corporate banking instead of investment banking?, Unpacking Corporate Banking at Citi/BAML?, Q&A: Corporate Banking Associate, Global Credit Rating Agency ---> Backdoor to High Finance
Serious question, why would you make that move? What’s the draw of a ratings agency?
My long-term goal is credit research, preferably buy-side, but I’m not oblivious to the fact that this is not a very smooth transition and that there is a massive gap in terms of the knowledge/skills/experience required for these roles.
The shorter-term plan here is to use corporate ratings as a stepping stone into credit research, as I believe that would build on my current credit experience, but in the context of corporate debt securities and the analysis of the overall macro picture, whereas my current role is incredibly focused on a single location, only dealing with bank loans.
This career path seems like it is more structured and it directly gives me more of the required experience and skills than anything else.
But of course I am open to other suggestions or ideas. Any input is greatly appreciated.
Bump.
Although the bot answer is great, I would appreciate some other perspectives.
Sorry for the delay, if you want a buy side credit seat the more tried and true method has been move into corporate banking and then over to lev fin or directly to private credit. I’ve known some people do ABL to buy side. The ratings agencies have in my opinion worse exits. I was at a big 4 BS bank in a PM/underwriting seat and we held the pen on models. I don’t think you need that just a shop that will do good work it could be a super regional or even a regional, but one that does HY and does the full gamut not just TLA/RCFs to IG issuers.
Thank you for the answer! Super helpful perspective.
I guess I should have clarified that when I say "buy side credit research", I mean something at an asset management firm where I am analyzing specific issuers and specific issues of corporate bonds, commercial paper, coming up with investment ideas based on relative value, potential mispricings, trading CDS and whatnot. Is that an accurate definition of credit research?
With that being said, are CRAs still not a very good pathway for that?
Leveraged finance seems to be more appropriate for a direct lending or private credit role, but would that still be an appropriate move for what I'm describing?
Thank you once again! Really appreciate it!
Probably not, I feel the ratings agencies generally aren’t viewed as being great for that sort of training. Take a look at any of the big mutual fund complexes’ websites and see where the PMs and analysts were beforehand. I also think traditional AM is under pressure, particularly with passive flows. Fixed income has remained much more resilient compared to equities, but it doesn’t seem like the future is particularly rosy.
In what world does the PM/underwriting hold the pen to the model? Credit doesn't build models.
At the bank I was at they did for any time there was bank balance sheet being used. I don’t mean to imply they were doing M&A modeling but they absolutely did DCFs, since the primary source of repayment was cash flow and the secondary was EV.
Currently at a rating shop. We have a direct pipeline to buyside. If credit research is your goal, rating will certainly be better than commercial and corporate banking mainly because the products they offer are revolvers/TLs compared to bonds which you will be rating. That in itself is more valuable. I’ve seen exits to Apollo, KKR, Blackstone from the shop i’m at but have never seen that from commerical or corporate banking. It mainly also depends on the team you apart of in terms of coverage.
That is really great to know!
Thank you.
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