I am starting as MBA Associate at a Semi Large Private Credit Fund ($8B Fund). Pre MBA I was BIG 4 Accounting and had little experience with financial modeling or Lev Finance. I am good at interviews and was able to talk my way into the job. Would appreciate if anyone can share where would be the best place to learn fundamental Lev Fins terminologies and Private Debt Modelling. Would like to be completely across technicals before starting role.
Terms I have heard before are OID, IRR, YTM, YTC, etc. I understand most but would be keen to get a textbook and practical modelling course to actually do it
Do people make fresh models or do we get models from sponsors to tweak? Do people do 3 statement models or just work out CFADS and make reasonable forecast assumptions
Though it might not be super useful / the most applicable there is a textbook called Moyer (the name of the author) I believe about distressed debt investing. Kind of different but you may find common/helpful concepts in there as a start. I believe that may be a popular book for those on this forum / in the distressed debt or restructuring world
Thanks!
Moyer would be semi helpful - I’d focus more on the discussions around covenants there for example.
If you Google, you’ll find a lot of books that are meant to introduce you to LF/PC, however I haven’t come across any which teach you credit modelling. Tbh it’s not as difficult as you may think once you get a hang of it. Operating models are provided by sponsors/coverage/M&A guys. I’d say both LF & PC are more about developing a fundamental understanding of what makes a good credit story. Drawing out a cash flow waterfall or debt sculpting isn’t rocket science and you’ll quickly pick on those once you’re on the job. Pretty sure people who hired you know your background and have their expectations adjusted to reflect that.
I’d focus more on LevFin primers (I know there’s one by S&P and another pdf by Bear Stearns you could get with Googling around). The rest - credit structures/legal structures/covenant analysis/term sheet negotiation skills/credit paper drafting, etc. are skills you’ll gradually acquaint yourself with as you progress within your role. Every transaction as you’d know is different in one way or the other and I believe it might be a near impossible task to come up with a comprehensive primer/book on this topic.
Thanks, was able to find the pdfs from S&P and Bear Stearns! Do you have any modelling course recommendations suited for Private Credit? Would LBO modelling be the most useful?
Yes to LBO modeling. Most private credit deals are for acquisition financing. If you can do a full LBO well and understand the mechanics/best practices of building an LBO model, then you should be able to pick up specific nuances on the job such as sensitizing for covenants, different ways to squeeze return out of a debt instrument, etc.
One of the most helpful resources I’ve found is A pragmatist's guide to leveraged finance: Credit Analysis for Bonds and Bank Debt a book by Robert S. Kricheff. It gives you exposure to different areas of leveraged finance which should be helpful when you start.
Best of luck!
Thanks, would you happen to have a pdf? cannot find one online
Chapters 4/5 of Rosenbaum and Vault Guide to Levfin - read these before, during and after my SA and it all came together quite nicely. Haven't bought any modelling courses myself but WSP/BIWS are the ones I've been recommended by friends.
Thanks! Would you happen to have a pdf? cannot find one online. I think the Vault has been discontinued? Will look into WSP
Follow this link and you should be able to download:
https://oiipdf.com/vault-guide-to-leveraged-finance
I think someone already recommended this but here’s the link in case you don’t have it:
https://www.wallstreetoasis.com/files/265576251-LeveragedFinanceHandboo…
In retrospect I probably would’ve read the one above, but you can see which one you like more :)
Currently a Sr. Associate at a large credit fund. Just know how to build a LBO under multiple scenarios and not just cash free debt free basis. Also know how a debt refi model works. You are not always providing new financing...its also a refi, div recap and etc. I wouldn't focus on anything else.. you got the job so you know the basic stuff. Moyer is not worth the time if you aren't doing RX IB or stressed/distressed type lending. Pragmatist Guide to Lev Fin is great if you know nothing at allll. You will be spending a ton of time in data rooms so know short cuts well.
Thanks, that is very useful insight. Would you also recommend WSP for learning LBO/Debt Modelling? Are there any resources specific to Debt like modeling?
thanks man v helpful
do you mind sharing any resources you have? interviewing for a MM for their credit investing team (includes PC)
saved (levfin modeling)
I am sorry, I am new to WSO. Is the comment stating that there are Levfins modelling saved somewhere? Sorry about the confusion
Would recommend grabbing a copy of The LSTA's Complete Credit Agreement Guide 2nd Edition
hey can you share how you land the PC job directly from business school? I'm interested in this space too and everyone I knew going have levfin/ib backgrounds.
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