Detailed information for Lev Fin IB group?
I am an incoming first year analyst in IB and am trying to get into the Lev Fin group when I start (I will start as a generalist) - I am not a finance major so I was wondering if anyone had any recommendations for preparing for this group (i.e. leveraged finance books, websites, classes to take next semester, etc)? I have already started trying to network with members of the group but I don't want to embarrass myself if they start asking me technical questions.
Lev Fin? How to Prep (Originally Posted: 07/19/2013)
Hey guys I am really interested in Leveraged Finance as a separate area as well as the traditional banking route. In terms of interviews, are technical questions/material to be aware of any different than the typical banking material? I am just trying to get an idea of how I should prepare for a Lev Fin interview if I end up getting on for next year SA recruiting. Thanks
In my interview, they focused on trends in the debt markets as well as the spreads, etc. It was fairly basic and they also asked questions regarding modeling and areas that are going to affect EBITDA.
Okay cool thanks. And just to be clear, what exactly do you mean "areas that are going to affect" EBITDA?
Just like other IBD interviews with more focus on capital structure and types of debt, and LBO valuation, maybe recapitalizations and refinancings
Could you guys recommend any material in which I can read to prepare on some of these topics? I have a ton of IB guides, but they really focus on traditional banking and valuation/accounting type questions. Nothing like you noted above
https://www.lcdcomps.com/d/pdf/hyprimer.pdf
https://www.lcdcomps.com/lcd/na/2012/09/07/2012%20Guide%20To%20US%20Loa…
http://www.macabacus.com/valuation/lbo/overview
http://www.macabacus.com/terms/original-issue-discount
http://www.macabacus.com/terms/payment-in-kind
Handbook of Fixed Income Securities - Fabozzi
anything related to debt. LBO questions are bound to come up in interviews. Try to understand the overall picture with LBOs. Some shops ask you to create a paper LBO model, but I didn't come across any that asked me to do so during summer recruiting, only during FT. Paper LBO model is nothing crazy - given 5 year projection, you just list out some assumptions, spread out cash flow over few years, and exit. Do some quick math to get to a ball park IRR number. That's the most technical lev fin interviews would get in my opinion.
Do you, or anyone, have a PDF copy that you could PM me?
These are very helpful, thank-you
Calling all current Lev Fin bankers (Originally Posted: 05/31/2007)
I'm going to be starting on the Lev Fin desk at a BB in August, and I just wanted to ask anyone out there on iboasis who is or has worked on a Lev Fin desk to give a general sense of how the work day unfolds, common pitfalls for anaylsts, and things one can do to prepare for the job (in terms of reading, psychologically, etc.) Any help would be greatly appreciated. And please no noob shit from sophomore wannabes who've read a vault guide. Much thanks in advance.
Are you actually on a desk or in a group with cubicles? I always find it interesting when some banks have groups and some act more like traders.
Lateral offer tier-1 BB leverage finance. Best way to prepare? (Originally Posted: 12/21/2015)
This week, a tier-1 BB firm (GS,MS) made an offer for me to join their leverage finance team at the analyst level. I come from a consulting background and I've been looking to make a switch into banking for a while now. Hence, I've decided to accept this offer.
My question is - what's the best way for me to prepare for this role before it starts? I have about a month before starting.
In an interview, one of the associates mentioned that my daily role would involve developing the capital structure part of the lbo model, due diligence (credit spreads, legal, shareholder), documentation ( drafting facility agreements), and minor process driven work (coordinating with back/mid office on finalizing KYC docs, etc..)
I've studied finance/economics at a target school for UG and Masters. So I understand the different financial models pretty well.
Did you meet any analysts while you interviewed? If so, reach out to them to see. That is what I did when I lateraled. Chances are, given your background, they will not be expecting too much from you, but like you have suggested, it will not hurt to be prepared.
I didn't have any individual interviews with an analyst. In the two super days I had, it was mostly associates or an associate + analyst. Here the associate would lead the discussion and the analyst would mostly observe. So, I didn't get to build much of a rapport with them at the time. Plus, the entire process was drawn out over nearly three months, and I can barely remember who I spoke to.
Personally, I think Moyers book is good for understanding the capital structure but may be overkill for you. How long have you been in consulting out of interest?
2 years. So it's kinda a late start in banking. But that doesn't really bother me. Everyone's got their own path in life.
Brushing up on your general accounting skills is always a good idea.
Other than that, read through some leveraged finance debt primers. If you can, do your best at familiarizing yourself with the basics of the diff instruments (Pro rata, TLBs, HY, etc) and where they fall in seniority within the capital structure (essential for LBO modeling).
It would also be helpful to learn the various pros and cons of each piece of financing (costs (interest rates and amortization) and flexibility (prepayability, maintenance vs incurrence covenants), etc.
It's helpful to learn the basic differences between positive and negative covenants but really this will come after many fun hours pouring through OMs and credit agreements.
If the above is already old news then congrats, you're in an awesome spot. If it only sounds vaguely familiar (or completely Latin), then don't stress it, you'll pick it up fast.
Feel free to PM me with any questions.
Thank you for the insight. Much appreciated. A lot of it is familiar to me as I did some serious reading up for my interviews. Especially on lbo models, different tranches of debt / their properties etc. I'll do some more research and hit you up if I've got more questions.
Cheers mate
Catch up on the markets.
GS/MS LevFin is much more of a capital markets oriented team than other BBs. Most of the modeling is done by the industry groups.
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