Hey monkeys,
I’ll be interning in a securitized products origination team at a BB this summer (if summer internships happen...) and am wondering if any of you have any experience at the junior level in an SP team. Trying to get a gauge on the type of work an analyst might do, hours, typical path (A2A, edit ops...), anything you might know. There’s not a lot of love on here for SP so any info helps.
Stay safe and sane everyone!
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I’ve worked in SP from first year analyst to associate at both MM and BB. It largely depends on the team and how active they are in the space. Smaller teams in the new orig side typically get a lot of smaller roles on deals that aren’t too involved at the junior level. Meaning internal risk approvals updating internal pitch and market update decks with creds etc. if you’re team is a leader in the market then you’ll have mainly lead structuring roles on deals. Meaning you’ll be running the deal and it’s much more involved and better for development as an analyst. Daily work on the deal side would include data scrubbing, lots of chasing third parties for document comments, etc. as well as listening in on calls with senior management at the client and investor calls. When deals aren’t taking up a lot of your time you can expect working on a lot of analytical work to develop new structures and deal types which involves running cash flow model stresses, reading through offering documents and putting together a ton of collateral and structure comparisons.
Also hours are shitty. Like 9 - 11 typically with stretches of months where it can be worse. Expect working most weekends at least lunch-dinner time on Sunday and being on call for MDs 24/7. 2am nights aren’t unusual (1x per month) and 4am nights are rare but do happen occasionally (REIT/PE/HF, whole loan trading if you want, asset manager who buy these products, FIG IBD (maybe).
What exit opportunities do you see with whole loan traders?
Pretty on point response.
I’m in SP as well - currently covering esoteric assets (aviation, infrastructure, rail, etc).
My advice is to try to work with more flow assets initially (auto, equipment, credit cards, etc) so you can get a lot of practice since these are fast paced deals with lots of volume in a ‘normal’ market. Eventually move into esoteric assets since that’s where you get to be creative with clients and investors.
how will securitized products be impacted due to covid 19? is the group recession proof or no?
The main concept of securitization is to rely largely on the underlying cash flows from a company’s assets that are securitized rather than the company itself. These securitized assets are segregated in a bankruptcy remote entity to avoid disruption to investors when the company goes under. So as long as these assets generate enough cash flow to pay debt obligations, the deal is doing fine.
The group isn’t recession proof but can be fairly protected if deals are structured well. Obviously in a distressed market like right now, new originations are significantly down but so are other product groups.
In mid-March, the capital markets was completely shut for securitized products but it has recently opened up with “flow” assets like auto loan / lease and equipment. Esoteric deals will take some time before returning but deals are still being worked on to get them ready and waiting on sidelines.
Any resources for learning about structuring and cash flow modelling? I'm an An1 on the Origination side but want to be more familiar with the structuring/analytical side as that seems most transferrable to structured credit funds (and just more transferrable in general vs PPT). I don't have a math/stats/programming background and haven't been able to find any online courses for Intex or cash flow modelling
can people lateral over to IB from securitized products? how easy is it?
Following this thread.... also an incoming FT in MBS, btw
MBS hours are going to be brutal. Because of COVID19, issuers have been scrambling for cash. Largely has to do with warehouse lines being cut, margin calls being posted on warehouse lines because banks have been haircutting the mortgages used as collateral in the warehouse. Additionally, banks and hedge funds have been buying distressed mortgages opportunistically and are looking to securitize them.
Have fun!
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