Closest thing to structured finance desk - loans capital markets?
I was wondering a bit about what a good alternative to a structured finance/securitization desk would be? I interned in securitization over the summer but didn't get the return offer, instead got an offer for another internship in Capital Markets at the same bank. I mostly worked on private warehouse financings, no public securitizations (public market was dead as we all know). I actually did enjoy reading through all of the legal documents and the skills I learned from that - the redline documents, covenants, etc. A deal that I spent most of my time on as well was a revolver loans facility (origination of mortgages/RMBS). I wasn't spectacular at the modelling side of the job and feedback that I got was that whilst I was very strong throughout the internship, the team required very technically adept people, so the reason for no return (but strong performance yielded the return internship instead). I could do dynamic stratification tables using formulae but Python, vintage default curves, and cashflow modelling I wasn't 100% on.
Would loans capital markets/loans and acquisition finance be a good fit for me? I'm also considering DCM, but I enjoyed the slightly "slower" pace of securitization and delving deep into depth into the client. Does anyone have any light into the type of work that is done in these groups?
Thanks!
Bump
Curious what bank has a dedicated securitizations program
Not many. Only Citi comes to mind. Other banks it's usually through Markets or Capital Markets/IBD. E.g., BNP it's through their Primary Graduate programme. MUFG it's just through their IBD grad programme. NatWest used to run a Structured Finance grad scheme.
Are you the OP?
Thanks for the info.
As someone who has been in securitization their whole career, this is wrong. Many banks have securitization teams. Unfortunately, securitization is still unpopular, so learning in this field is trial by fire.
Just curious, which bank did you not get the return at? I want to reassure you that there is nothing wrong with you and that your group has some really unrealistic expectations. To expect an intern to do cash-flow modeling by the end of the summer is insane. Vintage curve analysis is a huge stretch too. Both cash-flow modeling and vintage curve analysis require great excel skills and creativity. Cash-flow modeling requires being able to translate legal docs to excel formulas, and this can get extremely complicated. Strats on the other hand are just pivot tables and are less complicated.
If you like structured finance, I strongly recommend that you apply to other banks. If you tell any structured finance professional what you wrote in your story, they'll think your group is nuts. To answer your question, LCM is nothing like structured finance. LCM is about selling loans to the market. No structuring is involved.
PNC has a dedicated ABF securitizations team that’s pretty modeling heavy
Spent time at a loans capital markets desk when I was an intern. Other people may know more than me, but since no one else has chimed in I'll give my thoughts.
Loans capital markets is pretty sweet from a WLB perspective. It is indeed rather legal heavy, with a lot of time spent with lawyers going back and forth on the loan agreement and termsheet. You pretty much won't be doing any modeling at all, and the role is pretty process orientated. This means that the bankers will be responsible for producing most of the materials (CIM, model), but loans capital markets will track prospective buyers of the debt, process diligence questions, handle documentation etc. You'll also be keeping track of the loan market via comps to provide the origination bankers with insight into what the market can handle in terms of loan pricing/structure/size.
For investment grade loans, you'd mainly be syndicating TLAs for general corporate purposes to other banks. Leveraged/acquisition facilities would be slightly more complex and you'd be selling TLBs to private credit funds, but most of the heavy lifting and analysis will be done by the LevFin originations team (I assume by "loans and acquisition finance" you are referring to the capital markets team that helps syndicate acquisition facilities; if you are thinking of the originations team plenty of info about LevFin on this site elsewhere).
If you want to try something less technical, enjoy facing the market, and prefer a "slower" pace loans capital markets may be for you. However, exit opps are somewhat limited, if that is something you care about.
Thank you! This was very helpful. +SB
I suppose also a good question might be what the difference is between corporate banking and loan capital markets? Looks like (to my untrained eye) they do very similar stuff?
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