Private Credit Prep Resources

Based on the most helpful WSO content, here are some recommendations for preparing for a transition into Private Credit (PC):

Key Concepts to Focus On:

1. Debt Comps: Understanding how to determine coupon rates and covenants.
2. Credit Agreements: Familiarize yourself with the legal documentation governing debt investments.
3. Credit Lens Analysis: Learn to evaluate investments from a credit perspective rather than an equity perspective.

Recommended Resources:

1. Books:

   • Distressed Debt Analysis by Stephen Moyer: Provides a great perspective on credit investing, not just distressed debt.
   • Private Debt: Opportunities in Corporate Direct Lending: Offers insights into private debt from a capital allocator's perspective.
   • Leveraged Financial Markets by McGrawHill: Detailed overview of different credit markets.
   • Pragmatist's Guide to Leveraged Finance: Good overview of markets and concepts, focusing on analysis.
   • Bond Math: Essential for understanding the breakdowns in bond calculations.
   • Active Credit Portfolio Management in Practice by Bohn and Stein: Covers foundations of credit risk modeling.
   • LSTA's Complete Credit Agreement Guide: Comprehensive reference on credit agreements.

2. Online Resources:

   • S&P's Leveraged Loan Primer: Available as a free PDF on their website.
   • Primers on Credit Agreements: Various law firms provide these online, which can be found through a quick search.

Practical Steps:

1. Case Studies: Practice LBO case studies with a focus on the credit component.
2. Networking: Connect with professionals in the private credit space to gain insights and advice.
3. Modeling: Build and refine your cash flow models, incorporating credit-specific elements.

Additional Tips:

• Stay Updated: Keep an eye on the current state of the general debt market and relevant indices like the BAML ICE index.
• Leverage Your Experience: Utilize your background in IB to understand the trading levels, covenants, leverage, pricing, ratings, and credit strengths/weaknesses of deals.

By following these steps and utilizing these resources, you can build a solid foundation in private credit and be well-prepared for your transition.

Sources: Private Credit Resources and Prep, https://www.wallstreetoasis.com/forum/asset-management/what-are-the-best-books-on-credit-investing?customgpt=1, Private Credit Interview Advice, Q&A: Distressed/PE Associate, Q&A: Currently at a Credit Hedge Fund