Capital One Leveraged Lending / Leveraged Finance (Cash Flow Underwriting)
Are any of you familiar with Capital One's LF / LL group? It appears to be a mixture of portfolio management and underwriting. I'd like to know how involved the analysts are in the underwriting process, deal flow, potential exit opportunities (i.e., credit fund, lateral to LevFin at bank), interview process, etc. Your insight will be appreciated. I was just hit up by a recruiter for the below in Atlanta. I currently work in credit risk at a large regional bank. Thank you in advance.
I took a look. Looks like Credit Risk + Portfolio Monitoring. 1 bullet seems out of place (but would be great if this was a responsibility: Prepare term sheets, commitment letters and fee letters with guidance; basic understanding of credit documents). Exit Opps: to Lev Fin, Loan Capital Markets & Syndicate (Loan Syndication)? Yes - to smaller banks, where sourcing top talent is a challenge, firms that aren't known for left leading deals, etc. You already have much of the skillset. Credit Fund: Not sure. I would assume less likely. Those opportunities are a small sample size, with different recruiting strategies for each depending on firm (post via Linkedin vs. bespoke recruiting/no Linkedin posting) --they're hard enough to land an interview as is.
Pasted your job description below for everyone's reference
Primary underwriting responsibilities may include:
Perform due diligence on industry and company performance; summarize findings & identify risks and mitigants
Analyze financial statements and spreads for credit strengths and risks; provide recommendations to mitigate risks
Prepare financial modeling inputs with guidance i.e. valuation, pricing, etc.
Evaluate structural enhancements and Capital One product offerings with guidance from deal team or relationship manager
Write and prepare credit approval documents; participate in presentations to credit officers
Work with internal partners to assist with closing process requirements
Prepare term sheets, commitment letters and fee letters with guidance; basic understanding of credit documents
Primary portfolio or asset management responsibilities may include:
Demonstrate ownership of a portfolio of existing customers with minimal guidance
Complete annual reviews and both material and non-material modifications on time with limited supervision
Monitor and determine upgrades or downgrades to risk ratings
Ensure compliance with credit policies and procedures for existing accounts
Respond to requests from internal audit and compliance
Ensure portfolio data is accurate, timely, and complete to ensure strong quality and reporting capabilities
This is basically a Commercial Banking credit risk role and not Leveraged Finance like at other banks. Credit risk/portfolio management is not preparing term sheets and fee letters.
I was hit up by the recruiter for an associate role on this team. It is front office and you will be preparing term sheets, negotiation and etc. I don't know how solid their deal flow is, and I doubt capital one ever agent much deals. This is a solid role for someone breaking into credit. Credit to lev fin / DCM is possible, but it's not as easy as people on WSO made it seem.
I have several college friends that work in this specific group and none of them are preparing term sheets. They are underwriting. Relationship Managers are preparing term sheets if they’re pitching a bilateral deal and underwriting is simply opining on the terms. Capital One does not lead anything so there’s going to be very little negotiation. They’re usually just accepting whatever terms the Agent has outlined.
You’ll gain solid underwriting skills in this role but know what you’re getting into. You’ll be preparing credit approval memos while the Sales guys will do 95% of the materials in terms of term sheets, preparing pitchbooks, etc. Analysts aren’t doing much of this work as a quick LinkedIn search shows that the bank has tons of junior Relationship Managers (not analyst level) that are probably doing this stuff.
It’s a middle office credit role which is not a bad thing. Like I said, I haven’t seen Capital One agent many deals so your client interaction is going to be very, very limited unless you’re working on a smaller bilateral deal.
I worked there (albeit a different levfin group) and this is mostly accurate. Market perception is improving and they're winning some more MM agencies these days, but you shouldn't expect to lead many broadly syndicated deals.
I think I know you. And your exit op was pretty solid giving your background. Isn’t your firm like 3-4 people and was just started?
if not I’m thinking about the wrong guy lol
Mostly true above, but here to set the record on a couple generalities:
"Cap One does not lead anything" -
1) Direct Lending - Unitranche "First-out" lending partner - many w/ HPS
-actually they do a ton of direct lending deals w/ HPS - arguably the largest Direct Lender (just closed $35B Mezz fund). HPS is comfortable partnering w/ CapOne
2) Cap One is active in healthcare sector - some left leads below - including an LBO, Div/Recap, and several M&A deals
2) Cap One - 2019 left lead deals
BorrowerSigning DateTrancheAmountPurposeIndustry
Deerland Enzymes Inc Oct-19 TL $20 M&A Healthcare
MH Claremont Holdings Sep-19 TL $109 M&A Services
Daniele Acquisition Sep-19 TL $161 LBO Business Services
PathGroup Holding Aug-19 TL $35 M&A Healthcare
MacStadium IncAug-19TLA$22M&ATechnology
Saol International LimitedAug-19TL$60M&AHealthcare
MMAC 150 Murfreesboro TN LLCMay-19TL$46M&AHealthcare
Aurora Senior Housing OwnerMay-19TL$207M&AServices
Rome Medical Properties LPMay-19TL$37M&AServices
Kasada LLCApr-19TL$100M&ARestaurants
Moberg Pharma North America LLCMar-19TL$49LBOHealthcare
Collagen Matrix IncMar-19TL$20Dividend RecapHealthcare
Black Mountain Systems LLCJan-19TLA$15M&ATechnology
3) Cap One - 2019 "right leads" - Joint Lead Arranger/Joint Bookrunner (league table credit /
-if its an underwriting for LBO- still get the same underwriting fee % as the left lead (2.25% - RC/ 1L TLB / 2.75% - 2L TLB ), so right-leads for inv. banks are important for hitting budget and ultimately contribute to bonuses. Yes, the Cap Ones, Societe Generales, BNPs etc will have more rights than lefts, but you'll still get the left lead experience under your belt here & there
Cap One - 2019 right leads (11 LBO deals, among others)
Nexstar Broadcasting GroupSep-19TakeoverMediaTerm Loan B 3,065,000,000
Global Payments IncJul-19MergerBusiness ServicesRevolver/Line >= 1 Yr. 3,000,000,000
Global Payments IncJul-19MergerBusiness ServicesTerm Loan A 2,000,000,000
PCI Gaming AuthorityMay-19TakeoverLeisure and EntertainmentTerm Loan B 1,300,000,000
VSP Optical Group IncAug-19Acquis. lineHealthcareTerm Loan 1,200,000,000
Nexstar Broadcasting GroupJun-19Acquis. lineMediaBridge Loan 1,120,000,000
Nexstar Broadcasting GroupSep-19TakeoverMediaTerm Loan A 675,000,000
Alliant Holdings I IncMay-19Dividend RecapFinancial ServicesTerm Loan B 530,000,000
Sabre Industries IncApr-19SBOUtilitiesTerm Loan B 445,000,000
Red Ventures LLCJul-19Acquis. lineBusiness ServicesTerm Loan B 425,000,000
OEConnection LLCSep-19SBOAutomotiveTerm Loan B 422,000,000
CLP Healthcare Services IncOct-19LBOHealthcareTerm Loan B 400,000,000
Compassus Intermediate IncDec-19LBOHealthcareTerm Loan B 400,000,000
AccentCare IncJun-19SBOHealthcareTerm Loan B 355,000,000
R1 RCMJun-19Debt Repay.HealthcareTerm Loan A 325,000,000
Golden NuggetOct-19Acquis. lineRestaurantsTerm Loan B 300,000,000
Accel Entertainment LLCNov-19MergerLeisure and EntertainmentRC 240,000,000
VSP Optical Group IncAug-19Acquis. lineHealthcareRevolver/Line >= 1 Yr. 250,000,000
Accel Entertainment LLCNov-19MergerLeisure and EntertainmentRC 125,000,000
Accel Entertainment LLCNov-19MergerLeisure and EntertainmentRevolver/Line >= 1 Yr. 100,000,000
Accel Entertainment LLCNov-19MergerLeisure and EntertainmentStandby Letter of Credit 10,000,000
LegalShield [ex-PRE-PAID LEGAL SERVICES INC]Mar-19Dividend RecapServicesTerm Loan B 175,400,000
Zix CorporationFeb-19TakeoverShippingTerm Loan A 175,000,000
Deerland Enzymes IncOct-19M&AHealthcareTL$20
CF Sauer CoAug-19LBOBeverage, Food, and Tobacco ProcessingTerm Loan A 110,000,000
MH Claremont Holdings LLCSep-19M&AServicesTL$109
Pediatric Associates Holding Co LLCMar-19LBOHealthcareTerm Loan 105,000,000
PCI Gaming AuthorityMay-19TakeoverLeisure and EntertainmentRevolver/Line >= 1 Yr. 100,000,000
Abode Healthcare IncAug-19SBOHealthcareTerm Loan B 100,000,000
R1 RCMJun-19Debt Repay.HealthcareRevolver/Line >= 1 Yr. 100,000,000
Addus Healthcare IncSep-19TakeoverHealthcareRevolver/Line >= 1 Yr. 50,000,000
Daniele Acquisition LLCSep-19LBOBusiness ServicesTL$161
Daniele Acquisition LLCSep-19LBOBusiness ServicesRevolver/Line >= 1 Yr. 20,000,000
PathGroup Holding CorpAug-19M&AHealthcareTL$35
US Radiology SpecialistsAug-19Acquis. lineHealthcareDDTL 230,000,000
US Radiology SpecialistsAug-19Acquis. lineHealthcareDDTL 190,000,000
US Radiology SpecialistsAug-19Acquis. lineHealthcareRevolver/Line >= 1 Yr. 45,000,000
Orgain LLCNov-19LBOBeverage, Food, and Tobacco ProcessingTerm Loan A 75,000,000
Caliburn International LLCMar-19Dividend RecapFinancial ServicesTerm Loan A 75,000,000
MacStadium IncAug-19M&ATechnologyTLA$22
Saol International LimitedAug-19M&AHealthcareTL$60
Dovel Group LLC (The)May-19LBOTechnologyTerm Loan 70,000,000
Octo Consulting Group IncApr-19LBOBusiness ServicesTerm Loan B 67,500,000
Sabre Industries IncApr-19SBOUtilitiesRevolver/Line >= 1 Yr. 65,000,000
LegalShield [ex-PRE-PAID LEGAL SERVICES INC]Jul-19Acquis. lineServicesTerm Loan B 60,000,000
Saol International LimitedAug-19Acquis. lineHealthcareRevolver/Line >= 1 Yr. 10,000,000
KabaFusion Holdings LLCJan-19LBOHealthcareTerm Loan B 60,000,000
Octo Consulting Group IncJul-19Acquis. lineBusiness ServicesTerm Loan B 53,000,000
Compassus Intermediate IncDec-19LBOHealthcareRevolver/Line >= 1 Yr. 50,000,000
Orgain LLCNov-19LBOBeverage, Food, and Tobacco ProcessingRevolver/Line >= 1 Yr. 50,000,000
OEConnection LLCSep-19SBOAutomotiveRevolver/Line >= 1 Yr. 50,000,000
OEConnection LLCSep-19SBOAutomotiveDelay Draw Term Loan 40,000,000
Pond Holdings IncJul-19LBOServicesTerm Loan 35,000,000
Discovery Practice Management IncJun-19Acquis. lineHealthcareDDTL 20,000,000
MMAC 150 Murfreesboro TN LLCMay-19M&AHealthcareTL$46
CF Sauer CoAug-19LBOBeverage, Food, and Tobacco ProcessingRevolver/Line >= 1 Yr. 25,000,000
Zix CorporationFeb-19TakeoverShippingRevolver/Line >= 1 Yr. 25,000,000
Aurora Senior Housing OwnerMay-19M&AServicesTL$207
Pediatric Associates Holding Co LLCMar-19LBOHealthcareRevolver/Line >= 1 Yr. 20,000,000
TAIT LLCOct-19Acquis. lineLeisure and EntertainmentTerm Loan 20,000,000
Pond Holdings IncJul-19LBOServicesRevolver/Line >= 1 Yr. 20,000,000
Dovel Group LLC (The)May-19LBOTechnologyRevolver/Line >= 1 Yr. 20,000,000
Rome Medical Properties LPMay-19M&AServicesTL$37
Kasada LLCApr-19M&ARestaurantsTL$100
Abode Healthcare IncAug-19SBOHealthcareRevolver/Line >= 1 Yr. 20,000,000
Bristol Hospice Holdings IncMar-19Acquis. lineHealthcareTerm Loan 16,300,000
Abode Healthcare IncJun-19Acquis. lineHealthcareTerm Loan A 15,500,000
Moberg Pharma North America LLCMar-19LBOHealthcareTL$49
KabaFusion Holdings LLCJan-19LBOHealthcareRevolver/Line >= 1 Yr. 15,000,000
Octo Consulting Group IncApr-19LBOBusiness ServicesRevolver/Line >= 1 Yr. 12,500,000
Moberg Pharma North America LLCMar-19LBOHealthcareRevolver/Line >= 1 Yr. 10,000,000
Collagen Matrix IncMar-19Dividend RecapHealthcareTL$20
R2C SA LPMar-19Acquis. lineFinancial ServicesRevolver/Line >= 1 Yr. 150,000,000
Zix CorporationFeb-19TakeoverShippingDelay Draw Term Loan 10,000,000
Vyanet Operating Group IncFeb-19TakeoverServicesRevolver/Line >= 1 Yr. 60,000,000
Black Mountain Systems LLCJan-19M&ATechnologyTLA$15
Do you mind if I PM you?
Go for it
Do you work at Capital One? Are you in the healthcare group? If so, would you mind sorting out fact from fiction? Thanks.
I don't work at Cap One. Don't have insight into industry group strength (I don't even know what that means. My friends call me loan boy - lev fin space is my wheelhouse. Just look at the data - make your own conclusions. They lead a good # of deals. What's your concern here / end goal?@
What’s this right vs left?
Right lead / Left lead
Yeah I work at a larger bank in a product group but C1 participates in a lot of our deals. Most of the deals listed are in the healthcare space which is very strong but TMT there is mediocre.
I’ve generally worked with C1 across most groups there and IMO the strongest groups would be Healthcare, Financial Sponsors, ABL. TMT seems ok.
.
I'm unsure if you have related experience, but the recruiter told me at the beginning of the convo b/t 85-95 w/o bonus. This is for ATL. It may be higher or lower depending on which region you reside and group you are in (not exactly sure). I'm in the TMT process. According to the above posts, it seems the HC group is top notch. Which HC group are you interviewing for, real estate team? good luck.
There's a lot of misinformation on this forum about credit / lending. Let me clarify, corporate banking / commercial banking (relationship/coverage) don't do any of the credit structuring at BB + Wells Fargo. They make pitch books that include term sheet CREATED by underwriting, which is a product team. There's dedicated credit analyst / underwriter that prepare the term sheets. I think the misperception on why people believe relationship manager prepare term sheet is because term sheets tends to be market and doesn't change dramatically from deal to deal. Therefore, RM may have a standard term sheet as a talking point.
This is from my own experience working in ABL at a top lender who agent most of the deals (we typically make the market) and I know this is true across my peers at IB credit. I can't speak to middle market commercial and small business. Corporate banker / commercial banker don't do any of the modeling at my firm, they literally just pitch and manage relationship. Most of them have deep knowledge in credit, however they don't make the final decision. Everything is run through a credit committee. This may differ if you started in the business 4-5 years ago, but this is typically the case in most firms now. I had a recruiter reach out to me for an associate role at the same tech team in Atlanta, you will be on the deal team with direct client contact.
I worked at capital one previously in their crp program. Just. Few observations while I was there. Like they said you won’t be creating term sheets or negotiating. You typically get a CIM from the RM and then credit puts together an internal report for the risk committee so that they can decided to do the deal or not. When capital one is leading a deal they aren’t negotiating or creating a term sheet that is done entirely by the syndications desk. Underwriting puts together slides for the risk committee too approve. They can get on a call with the rm and ask them questions about there business.
Capital One doesn’t like to do other deals banks would because of doc leakage. Even though all the other banks are doing it like jpm bofa etc.
TMT is technically housed under Healthcare because there portfolio isn’t big enough yet... They seem to have hired a lot of corporate bankers from STRH.
From UW there isn’t many exit ops, the best exit ops I’ve seen are coming from the Orignators/RMs since they have all the industry contacts for the most part.
underwriting at capital one is what many call credit risk at JPMC.
The firm has great culture and it seems a lot of people have came there after grinding it out at other shops and now want to relax this is more so on the capital markets side not so much UWPM.
Itll be dam near impossible to switch to the RM side coming from Underwriting because there’s not a program in place like at other banks where you start out as an analyst/associate and have the option to go into UW or RM.
Also did the recruiter say 85-95 plus bonus? Or did she say that you wouldn’t get a bonus in that role? Just for a point of reference they start there analyst in Houston at 75k and give them a stipend for living in other cities like Chicago and New York.
Forgot to add if capital one is leading a syndication credit nor the RMs won’t make the lbo model that goes out to the other lenders capital markets will. An MD from Capital Markets told me, “they don’t have the sophisticated modeling skills to do it that we have on this side of the house”
I've posted elsewhere in this thread but I did not have the same experience as this guy. I'll say up front that all these points may vary heavily between groups.
I was on the underwriting side and was very involved in negotiating legal docs (or pushing back on terms) for all left/right leads. We also had frequent direct contact with financial sponsors and management teams.
Asset leakage point is mostly true as they seem to take the issue more seriously than other banks. The flip side of this is you will learn a ton about legal documentation early in your career which puts you at an advantage to peers.
There isn't a clear path to the coverage side from underwriting but I saw it happen many many times. Build relationships internally and it's fairly easy to move laterally there. This is not unique to capital one.
To address the reply about where the modeling expertise lies - again, not my experience. Speak for yourself lol
Which groups are the most active? I had a Cap One recruiter reach out to me in the past on a exploratory basis for future opportunities but I couldn’t find a ton online about which groups were the best or had the most deal flow. Healthcare? ABL? Financial Sponsors?
Healthcare and generalist Financial Sponsors (Diversified Industries) are their strongest and most competitive groups. ABL as a whole is segmented into generalists and HC/TMT, both of which have healthy deal flow. Depends on what you're interested in doing
That's very interesting. My team don't do any TLA, so I can't speak to that. However, in some deals it will be ABL revolver plus TLB. Lev Fin will do the TLB portion. And, the people who does ABL syndication also sit in Lev Fin. I was always under the impression that most of the BB have a similar structure, where credit and relationship is broken out into 2 different teams. I have done a lot of deals with JPM/BofA/Wells/Citi in both participant / agent capacity and I was always under the impression that's also how they function. (I also work in one of the listed firms.)
I guess for the benefit of the OP, I have spoken with the recruiter at CapitalOne who reached out to me on LinkedIn about the role last year. I briefly got on the phone with him, but didnt proceed forward because I don't want to stay in credit long term. From the conversation, this is a front office role and the 3 MDs heading the team was ex GE capital, Antares and SunTrust.
Forgot to add that they have this weird mentality that they want everyone to start put in credit and do it for atleats 5 years before becoming a Junior RM. I'm sure this make sense but IMO its dumb considering other banks have programs to prepare analyst to become RMs. Anyone who wants to be on the relationship side could just leave to one of these other banks. Also, during my time there I talked to a lot of Senior analyst and associated and everyone said they would want to be on the relationship side but that there isn't that many spots. This came from someone on their healthcare team.
This doesn’t seem like a great way to retain talent. I did 3 years in credit risk at a BB and was able to move into a junior RM/Originator role.
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