Books related with corporate loans - Big help to receive any manuals

Are there any books related with corporate loans, i.e revolvers, term loans, liens etc.?

I've been searching this topic at Amazon but with little avail.

I am basically interested in how loans are priced, how creidts are approved, and various sorts of financing techniques utilized by the corporate banks.

Or it would be a big help to receive any manuals from who works at the corporate lending department. I am intended to buy it as well...

Thanks in advance!

2 Comments
 

Lemme save you the time:

  1. Corporate loans are usually priced based on Libor, plus a premium for taking on the risk. In the industry, people usually say, x product is priced a "L plus 10" (where 10 is however many bps over libor its priced at). The number of bps paid over libor can be based on a number of things, but most commonly on cashflow leverage (EBITDA/Funded Debt). Most deals have like 4 or 5 tiers that are negotiated. So for 1x leverage, the product may be priced at L+10, then L+20 for 1.5x, then L+30 for 2x. This usually continues in increments of 0.5x.

  2. Credits are approved by lowly analysts first spending 1-2days reading public information books that include 10-Ks, 10-Qs, earnings transcripts, and equity research. The analyst then distills this immense amount of info into a 20-40page underwriting memo that nobody will read. The analyst will generally also make some fancy charts, pie graphs, and bar graphs to illustrate key operating and financial issues with the company (people might actually look at these, so they better look nice). If you are at a mildy sophisticated shop with half-intelligent directors, you will also find yourself constructing operating models and making multi-case projections. Next, the day before the credit committee is scheduled to convene, the analyst generally scrambles to reformat everything and fix grammar errors in the document that nobody will read. Next, your director will skim the document and add commas and semicolons to your memo to make himself feel important. He will then approve of your underwriting and promptly attach his name to the front cover (and thus take all the credit). The memo is then sent to the credit risk group who generally has already made a decision about the loan before the underwriting memo even gets to them. If they havent already made a decision, they ask "how much money are we gonna make off this deal?". If its not a big number, they follow up by asking "what are the chances of this deal bringing us more business from this particular client in the future, and how much money will we make off of those deals?". If this number is big, then approved. If this number is small, then the clients gets booted from the bank.

  3. I have no idea what you mean by financing techniques. Corporate banks only pitch bridges, revolvers, and term loans. They may also pitch other products like treasury management and public issuances, but only briefly. If the company seems interested in these alternative products, the relationship manager will call up a DCM guy or something to take it from there.

Feel free to ask more questions. Did you interview recently? With which bank?

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