Model Case Studies for Credit CB/IB Analyst roles?

To prepare for credit-related roles in Corporate Banking (CB) or Investment Banking (IB), focusing on case studies and modeling is essential. Based on the most helpful WSO content, here’s how you can get started:

1. Key Models to Practice

• Operating Models: Build a 5-year operating model projecting revenues, EBITDA, FCF, and key balance sheet metrics. This is crucial for understanding performance drivers and stress-testing scenarios.
• Short-form LBO Models: While not as detailed as PE-focused LBOs, credit analysts often need to create simplified LBO models to assess leverage and repayment capacity.
• DCF Models: Credit analysts frequently use DCF models but with a credit perspective, focusing on cash flow stability and debt service coverage.
• Debt Comps: Learn to analyze debt comparables to determine coupon rates and covenants, which are critical in private credit and acquisition financing scenarios.

2. Case Study Preparation

• Credit Writeups: Practice creating credit memos that include:
  • Industry risks and company-specific risks.
  • Comparisons to comps.
  • Financial overview, including historical FCF and EBITDA adjustments.
  • Risks and mitigants.
• Downside Scenarios: Develop stressed scenarios by shocking key company/industry-specific risks and analyzing debt service capacity under adverse conditions.
• Investment Memos: For IB-related roles, practice writing short investment memos covering recommendations, company/industry analysis, financials, and due diligence questions.

3. Resources and Practice Tips

• Old Case Studies: Reach out to trusted analysts or colleagues for old case studies. These are often passed down and are excellent for practice.
• S-1 Filings: Use recent S-1 filings as a basis to build models and memos. This mimics real-world scenarios where you analyze a company’s financials and prepare recommendations.
• Networking: Engage with professionals in the field to gain insights into specific modeling expectations and case study formats.

4. Additional Notes

• Acquisition/Bridge Financing: Understand how acquisition financing works, including capital markets bridges used to backstop events like acquisitions.
• Analytical Rigor: Focus on bridging Adjusted EBITDA to FCF and ensuring accuracy in historical financial analysis, as this is emphasized in CB/IB credit roles.

By practicing these models and case studies, you’ll build the technical skills and analytical mindset needed for credit-focused CB/IB analyst roles.

Sources: Credit Analyst Q&A, My Path - MBA Banking Associate to PE, Private Credit Case Study, Q&A:Commercial Banking SVP Ask Me Anything