JPM - "IB Credit"
I'm on the buyside and someone from "IB Credit" at JP Morgan is applying. What exactly is "IB Credit" at JPM - I know it is not the levfin team. But is this like a credit risk function?
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Yes credit risk
Is this role an L ?
Credit risk- they call is IB credit because some of those people work alongside the deal team when there is an underwriting and their approval is required
Interesting. The resume said he/she “negotiated term sheet / credit docs”, “gained credit committee approval”, and “structured transactions”. So these seem like a stretch
No problem interviewing this kid if capable but not a fan of bluffing too much on resume
Are those not realistic functions for that role? Not too familiar with it, but maybe some WSO comments arent too reliable regarding it
All of those seem like normal functions for a first line credit team.
That team most likely knows the structure/terms that the agreement/transaction must have in order to receive credit approval internally. They probably work through the RM (or maybe speak directly with the client) in order to negotiate the agreement.
Credit’s responsibilities varies a bit across different banks, but it’s not much of a stretch. JPM has always paid their IB credit departments similar compensation as the more “traditional” front office IB groups (at least they did previously, not sure after they moved a lot of them to Texas) so it’s very likely they are a bit more engaged on the transaction underwriting side.
Nope, they cut pay in addition to forcing people to move, which is why a lot of credit people have been leaving in droves. There's been so many off-cycle credit openings in Texas and NYC since 1-2 years ago when word got out about moving the credit department to Plano, Texas.
OP -
Test their knowledge in the interview. I highly doubt that they are "structuring". It's probably senior people + legal spotting issues and putting pressure on the bankers to change the terms.
sounds legit to me based on how similar functions in my bank would contribute to a deal (though it’s often lead by the IBD, credit folks still do negotiate and opine on structure)
Come on man are you seriously trying to tell me you have not bluffed on your shit at some point to get to where you are at? If the kid is capable and can talk about deals does it matter if he was in a coverage at JP? Doesn't coverage at a BB spend 85% of their time churning slides and 5% of the time updating comps on models that were constructed in 2013, and the remaining 10% of their time figuring out how to bluff about their "deal experience" while interviewing for buyside roles like this?
I'm an IBD Analyst at JPM London. The 'Investment Banking Credit' role is simply credit risk for transactions. Not sure on the exact specifics / everything they do but they read through credit documents on proposed deals and assess any counterparty risk. They also look at transactions which JPM has used it's balance sheet to lend to clients and assess any risk to JPM on that, and then monitor/review these quarterly.
They are not on the transaction team in the sense they are not the team that does the lending, they just get sent the documents by the lending/transaction team and then review it and either propose changes to the credit agreements or accept them.
It is a middle office role. That being said, you do learn a lot and one girl in the JPM IB credit team managed to spin her role and go buyside in a credit fund joining as an investment associate after 1.5 to 2 years as a graduate analyst in JPM IB Credit. So exit opps are there you just need to know how to bluff/spin your CV to make the role sound better and bluff a little on your responsibilities during interviews. Which everyone does in this industry, so nothing wrong with that as long as you practice your technicals.
I'd advise giving the candidate a chance, just really grill them on technicals during the interview and who knows if you give them the offer they could end up being a top performer in your team.
OP here -- I'm not suggesting not giving the kid a chance. I'm genuinely interested in what exactly the role entails. Also on the bluffing point, I take a different view here. Bluffing is fine - but I always wrote what I actually did on my resume, even if it's just 0.1% of my time. Analysts don't "negotiate term sheets" with the sponsors and we just know that doesn't happen.
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Next you’re going to tell me analysts don’t actually make the pitch to the clients?!?
Agree v dumb for analysts to claim they do any sort of sales/speaking role or anything but slides/some numbers
I’ll play devils advocate on this. Most of the time these credit analysts at my bank just basically work to upsize or change the term of revolvers or extend them. The front office banking team does a bit of work on this led by the relationship banker (MD), but the credit people drive this process a fair amount. For us at a bank the same size as JPM, the credit analyst teams were basically a handful of guys for each sector, not uncommon for the team to be represented on the calls by an analyst + VP only. Anyways, my point is that it wouldn’t be crazy for the analyst on the credit side to get involved in structuring / negotiating terms for these transactions, which frankly 90% of the time are just extensions of revolvers that are existing and some tweaks to terms. Often the “client” wouldn’t even be the CFO but treasurer or assistant treasurer getting involved in these types of discussions.
Anecdotally, can you speak to exits from the credit risk function? I know moving internally to DCM / Lev Fin is possible but how about directly to private debt, etc.
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