Leveraged Finance

I saw in an earlier post ("Is Apollo that bad") and it brought back some memories. I was just going to respond in that thread but my post ended up being much longer than I had expected so I decided to start a new thread, and maybe address some questions you may have regarding LevFin deal dynamics. I worked in LevFin at a BB and I can confirm that Apollo is one of the toughest clients to handle - both from a junior standpoint as well as from a senior standpoint (basically at the MD-level). I unfortunately had the pleasure of working

09 Jun 2020

Question was posed to me earlier this week. How could an LBO happen without a bank? Could this happen through seller financing resulting in the structuring of a leveraged loan by the sponsor? How would this play out in practice?

06 Aug 2020

Anyone here working at Leveraged Finance/ Acquisition Finance at a BB in London? I am really curious about how your day-to-day tasks and responsibilities look like. Several questions I have (I have many more, but can add them later or ask via pm if possible): - Do you hold a personal portfolio of companies, and if so, how many tend that to be? - How lean are your deal teams, just you as an analyst and an investment manager/deal captain? - On a new deal or for an event of an existing client, what responsibilities are you given? For example, do you run Ratings and RAROCs for fee/margin pricing

18 Jul 2020

I'm pretty interested in the debt side of things and am looking to know the pros and cons of DCM and Leveraged finance. How do they compare in terms of hours, exits, interesting work, etc? The main exits I would be interested in are private debt funds like Ares / Golub or credit hedge funds.

25 Sep 2020

Former Leveraged Finance / DCM Analyst -> Associate at a BB, left before COVID (thank goodness or else I then would literally have no soul). Here to help those that are looking to get some inside detail in the job role, what you actually learn, and what you need to know during interviews. Really glad I was part of a product group vs industry, as I was actually able to help finance a VERY broad group of industry agnostic deals (gaming, tech, healthcare, industrials, CPG, etc). Pretty much all except for RE. Looking to improve a self-help tutorial online that a colleague and I also created to

20 May 2020

How are FCCR & DSCR calculated and what is the language usually like in a non-covlite scenario. The formulas I have seen are below. Are these correct? Also, for DSCR, how are revolver draw/(repayments), Pik non-cash interest, and optional prepayments considered in calculating the ratio. These ratios seem to be quite similar, so what is the conceptual difference between the two? FCCR: (EBITDA - CapEx - Mgmnt Fee - Taxes) / (Cash Interest Expense + Mandatory Amort) DSCR: (EBITDA - CapEx) / (Cash Interest + Mandatory Amort + Principal Repayments) I have never dealt with a FCCR/DSCR maintenance

01 Jul 2020

About I have been a longtime WSO reader (6-7 years) and some years down the track, I thought it would be helpful to do a quick Q&A I think this could be helpful in particular for (i) those looking to switch over from credit to equity investing, (ii) those interested in mezzanine / sub debt, and (iii) those interested in operationally focused / distressed PE Background - c2 years Bulge Bracket LevFin (ANL) - c2 years mezzanine / sub credit investing (ANL / ASO) - c2 years opportunistic / loan-to-own PE, mid-large cap, (ASO / VP)

18 Oct 2019

Hi everyone, great to be here! I'm just starting my journey to explore and improve my understand of finance and investing.

30 Dec 2020

Soooo much of my time is taken up by spreading numbers in excel, and by the time that's done i'm in a rush and can't actually take the time to analyze them. Sadly i work with mostly private financials that are given to us in PDFs... i use adobe acrobat but 99% of the time the rows/columns are completely out of wack and it takes me just as much time to reorganize it as it would if i just hardcoded the numbers. What are the alternatives to this, if any?

15 Dec 2020

Hi, I am interviewing for a Debt Advisory boutique and I have a c.3 hours debt capacity case study coming up in the next few weeks. Anyone have any insights on what such a case study would entail, where I could find simulations or more in general how to better prepare myself? I haven't got a LevFin background so any pointers would be very helpful.

09 Dec 2020

Does anyone know anything about the credit investments group at Credit Suisse? Recently applied to FT after they reposted it not too long ago, but can't find the application now. Seems like a lot of the investments team is from top tier Lev Fin programs like BAML and a few lateraling within CS, a lot of Wharton grads, and growth seems to be extremely solid, but I'm finding little to nothing else on the group itself. Any insights on reputation, performance, or anything else?

05 Dec 2020

How is a background in credit ratings viewed to get into leveraged finance/lending/corporate banking at the Associate/AVP/VP level? It's pretty clear looking at job descriptions and from my conversations with a few people that they generally look for someone with a background in levfin/lending within a bank or private credit firm, but would credit analysts from non-banking backgrounds (for instance rating agencies) stand a chance given that they do possess the skillset to perform fundamental credit analysis, run models, review credit agreements etc.?

02 Dec 2020

Does anyone know which BB and middle market banks with LevFin groups in Chicago? I believe JPM and BMO do, but is that it? Likewise, does anyone know which private credit groups (direct lenders) are in Chicago, other than Anteres, Twin Brook, and Madison Capital? Thanks in advance!

19 Sep 2019

I have accepted a Risk Management job at a large (too big to fail) bank in NY, i-banking division. 1. What is the job like in terms of hours/pay/experience/exit opportunities? 2. How difficult is it to move into a hotter division, say, i-banking or LevFin? Do you know anyone who moved from middle office to front office (anyone from RM?)? 3. If it can be done any tips on what to do (if I feel unhappy about RM job, should I talk to HR right away or wait for first evaluation)? 4. If you were to rank RM jobs on prestige, 1 being BO ,say IT, and 10 being i-banking, what would you assign? 5. How driven are the analysts in Risk Management (based on your observation, experience)? Is it difficult to stand out? Thank you.

16 Mar 2018

Not a JD/MBA, but I'm starting year 4/6 of an accelerated dual program where I'll graduate with an undergrad business degree and a JD. The important part is that I'm not graduating until 2023, which makes it impossible for me to accept a full-time offer at the end of 2021 summer. My business program places very well in IB & consulting in Canada (and even NYC to a lesser extent), my law school is relatively unremarkable. Long-term, my dream is to work in M&A advisory in a senior management position whether that be at a law firm (most likely) or IB. My question: What can I do to get some finance

28 Aug 2020

First-time poster here. I an Associate at a small CLO fund (~$2bln in AUM) and my job responsibilities include screening new credit investment opportunities in the primary and secondary broadly syndicated leverage loan markets (non-investment grade), as well as managing my current portfolio of credits.** My question is would a move to a direct-lending position at a private debt fund (i.e. Ares, Golub) be a feasible / strong career move? What are exit opportunities for someone in my position?** Thanks in advance.

10 Apr 2018

Hi guys, I'm really interested in Debt Capital Markets and Leveraged Finance in Canada and I was wondering if you guys could give any insight about it. How big are the teams for each, comp, exit ops, etc? I assume mostly the Big5 banks have teams in Canada, or do BBs in Canada do too? And lastly, what's recruiting like for these roles out of undergrad? Thanks!

28 Jan 2018

Hi there, I was wondering if anyone knew whether Lev Fin teams BBs will hire analysts mid-year or whether they would only consider recruitment through graduate schemes. I have been working in Debt Advisory for 2 years now and qualified as an accountant prior to this. I'm keen to look at Lev Fin options but would ideally like to avoid going in as a fresh graduate. I appreciate I would still need to start at an analyst level but wondered if others had heard of / seen similar moves in the past? If anyone has any details or recommendations on how you would go about this it would be greatly

04 Jul 2020

Hi all, I'm a final year master's student based in Europe who's just received a return offer for a European BB Lev Fin group. I like the space a lot, and really like my team and think this would be a good place to begin a career. The catch is that I feel quite strongly that I want to look at distressed situations (either sellside RX or investing) at some point in future, partly because the situations look more interesting on a deal-to-deal basis, and because I want to develop a comprehensive understanding of capital structure beyond the context of an LBO. My prospective firm doesn't have a RX

29 Aug 2019

I have a good shot at an opening at CIT within their Tech underwriting Lev Fin group. Most of what is written about them is 4+ years old on here. Anyone have an idea of how CIT has re-positioned themselves since crisis or even 3 years ago? Like are they "shit", as one monkey divulged on an old 13' post? I know I could make things happen and spin out to PE/IB if I took it, just want to make sure it's not a trap -- their earnings haven't been pretty lately at all. Thanks.

20 Jun 2017

Hello everyone, I'm interested in the state of the High-Yield Bond Market. I know that in the 80s high-yield bonds were used to finance large LBOs and that there was a few boom and busts. Are high-yield bonds still commonly used to finance LBOs? If so, does anyone have any idea on the percentage of high-yield bonds used for LBOs vs simply for fallen-angles and other regular capital raises? Also, does anyone have any idea on banks whose Lev Fin groups work primarily on financing LBOs? My ideal job would be to work on analyzing an LBO target, pricing high-yield bonds (or syndicated loans) used

15 Feb 2018

Great news. I finally landed a spot in DCM for the leveraged finance team of a very prestigious BB on the street. I literally started from the bottom, working my way up, and have been working at a mid-size to small boutique firm for the past year and a half. My old firm was super short on staff, so I am already use to working 100+ hour work weeks, working multiple assignments with tight deadlines. My question is what should I expect job/work wise going from a smaller shop to a top tier BB? What are some of the big differences that I should prepare myself for? I want to prepare as much as

16 May 2017

How do you think the Lev Fin groups will fare in 2020-2022/23? Obviously we don't know what will happen w/ COVID, but I think it's reasonable to say that a widespread vaccine will be developed by early 2021 & there will be a widespread recession over the next couple years. From a few conversations I've had, I get the feeling that some PE firms seem to be sitting on a bunch of dry powder but are hesitant to pick up new LBOs in the short term. In the meantime, these firms are focusing their time on liquidity solutions & other measures for their portfolio companies that are running out of cash

21 May 2020

Dear all, I will be sitting a Cash Modelling test later this week at a BB Lev Fin team. I have been trying to find out as much as possible about how such a model looks like and what are the main assumption included, however, I have been unsuccessful so far. It seems to be different from the standard LBO, DCF, ect. Has anyone worked with a cash flow model for debt repayment purposes? Any inputs will be highly appreciated! Thanks

05 Jun 2017

Just as the title says, what does it entail? I tried searching for it on the forums but all I could find were threads for the LevFin group within IBD. I am pretty sure that it is a micro oriented trading desk, but what kind of products do they trade? High-yield bonds, loans, that kind of stuff? I am specifically thinking of the LevFin trading desk of a large investment bank. TIA

18 Oct 2018

2nd year Credit Analyst for GE Capital type large undewriter looking to get into any Lev Fin group? Other than networking, anything I should be preparing for? Advice?

13 Dec 2016

Hello monkeys. I've accepted a job as a commercial banking analyst at a MM firm upon graduation with hopes of eventually breaking into lev. fin down the road, likely post-MBA. Is this is a feasible career path and what would be the best way to approach? Without giving too much away the bank I'm joining is a MM leader that is involved in a lot of PE deals and the role is known for being more modelling heavy than most commercial banking positions. I also have the opportunity to join either a debt capital markets, loan syndication or financial sponsors group following the initial training period

16 Jan 2016

How difficult is it to lateral from a market-based leveraged finance group to a modeling intensive leveraged finance group?

12 Feb 2019

Do I go for Leveraged Finance or a Coverage Group if private equity is what I'm interesting in pursuing long term?

09 Nov 2015

Does anyone have any commentary on the state of leveraged finance groups at various banks? The high yield and leveraged loan markets are obviously quite poor at the moment, but how has this impacted LevFin groups thus far? Have banks implemented a hiring freeze? \\

14 Jan 2016

So the title is a bit clickbait - I completely understand each career has its own merits and each individual enjoys different things. I've been in public finance for about 4 years now. Looking to potentially exit. The lowering spreads, lack of strong analytical work and pitching/RFPs amongst other things is driving me out. I'm looking for something with more deal focus (opposed to pitching) and analytical. DCM seems like it would be the easiest transition with the least hours. But less modeling and more pitching. Project finance on the sponsor side is my top interest at this point. It seems

07 Feb 2020

I assume non investment grade debt on an investment grade company trades higher than high grade stuff. I know that different tranches will trade according to the jump in leverage ratios, say between senior bank debt leverage and the leverage on the subordinated tranche. But if two below investment grade tranches are trading, one of an investment grade company and the other on a non investment grade company in the same industry with similar products, the former will probably trade much much lower. Technically, the leveraged finance market seems like it is only tapped by below investment grade

08 Feb 2016

What leveraged finance groups place the best at mega funds? I know groups that do the most modeling and are lead left is best, so is CS & BAML the best?

28 Apr 2018

All, First post on here, but have been reading and using the info for years. Thanks in advance for any response you might have. Essentially I'm wondering when jumping ship too frequently is a problem. Started in a rotational program in Markets at a BB and enjoyed the people, not so much the atmosphere (Duration: 1 Year + SA offer to full time). Got recruited to work in the BD/Strategy group of a fairly hot tech start up. The opportunity was awesome, met some of the best and brightest I've ever worked for/with and developed tangible tech chops. A new management team was hired and I had a good

31 Aug 2016

I wanted to ask a question on what the exit opportunities are like for someone who spends time as an analyst and maybe even associate in leveraged/sponsor finance. Specifically, it would be good to know what some exit opps are at some of the leading mid market players (i.e. GE/Antares). In your opinion, is this a good place to jumpstart a career in finance? Also, what is the LT career earning potential for someone in this field?

25 Aug 2016

Thoughts on lev fin on Golub, CIT and Antares? I know MM, but is it a good spot to start out at? Comp, exit opps etc

28 Apr 2017

Does anyone know about the reputation of this group? How much bankruptcy/restructuring do they actually do?

25 Nov 2014

Can anyone shed some light on any leveraged finance groups that sit on the West Coast? I'm only aware of WF in SF but looking to see if any other MM/BB LevFin groups are in CA as well.

18 Feb 2016

Anyone have any insight on the lev fin group at Citizens Bank? I'm curious as to how the group is structured given that it seems to sit within a commercial bank. Would also be helpful to understand how the detachment from RBS is affecting the group. Thanks in advance.

13 Nov 2015

I have an interview in about 2 weeks for an analyst position. I've done the LBO modeling course from Wall Street Prep and know how the process works. Assuming that's all I know, any advice on how I can go about prepping? Any advice will help greatly. Thanks

06 Aug 2015

Hi WSO, I have interviews coming up for a position in a private debt fund - as I have never worked in DCM/LevFin before, I am basically starting my preparation from scratch. Would anyone have any valuable insights and suggestions into how to best prepare? Any current market trends / sources to read upon this to be best prepared? I've also seen that the Distressed Debt Analysis book has been pointed out as suggested reading - would this be a good starting point / relevant for interview prep?

20 Jul 2015

Hey guys, I got an offer (SA) for Morgan Stanley's Global Capital Markets division, as they separate it from traditional investment banking. It's made up of 5 parts--ECM, DCM, Clients Solutions, Lev Fin and Project Finance. I want to do a great job this summer and try and move into actual IB, ideally M&A, for full time. I've narrowed my top choices within GCM down to Lev Fin and Project Finance, and I'm wondering which would better position me. Normally, Lev Fin would be the easy choice, but MS Lev Fin doesn't do any modeling. Project Finance is the only group within GCM that does--very

18 Apr 2016

Lev Fin seems to be one of the more variable groups I've heard in terms of average days. Specifically speaking, how do hours compare between BBs vs. Elites vs. Boutiques? Obviously the days are much slower than a DCM group but nature of the companies you advise could cause you to be in the office until 4AM. In percentage terms, what would the consensus be for the amount of 85+ hr weeks you will work in Lev Fin?

29 Apr 2013

I've searched WSO and M&I to the bone and I have some questions I could not find the answers to. I am wondering if those in-the-know or have previously worked in LevFin could chip in, for prospective monkeys like me. 1.) I'm still not sure on this - is leveraged finance more corporate finance based or more markets based? 2.) Some LevFin groups do their modeling in-house (JPM, DB, BoA) whereas some are mostly markets-based (Citi, MS, Barclays). Logically speaking, would it be right that the in-house modeling groups will naturally have longer "banking" hours whereas the more markets-based groups will have more "ECM/DCM" type hours?

07 Aug 2013

Hey guys, I rarely work in anything related to nuances in debt, and I'm here all night working through a project that requires a better-than-decent understanding. Brilliant. My questions are related to classification, so not bad...but resources online aren't super clear: Are investment grade syndicated loans senior secured or unsecured? What about leveraged syndicated loans? Also, how does this differ from investment grade and junk bonds? Finally, are revolver, Term-A, Term-B, etc. always fall under the umbrella of either investment grade or leveraged? If so, which one? If not, does it just

22 May 2014

Hi All, I'm new to the forums and have just recently started as an analyst in a leveraged finance group. As the title indicates, I'm interested in ways to become familiar with loan documentation, specifically industry standard negotiated points including restricted payments, available amount baskets, covenants, incremental facilities etc. I have a general understanding of the concepts of each but was hoping someone knew of a comprehensive resource(s) that explain these in-depth or personal experiences getting up to speed Thanks!

24 Oct 2014

I am an incoming first year analyst in IB and am trying to get into the Lev Fin group when I start (I will start as a generalist) - I am not a finance major so I was wondering if anyone had any recommendations for preparing for this group (i.e. leveraged finance books, websites, classes to take next semester, etc)? I have already started trying to network with members of the group but I don't want to embarrass myself if they start asking me technical questions.

02 Nov 2012

Hey everyone, Just wondering what the general view is on restructuring at one of the top 3 vs Levin at a BB? Interested in the differences between the amount you learn, type of exit opps, worklife etc.. any thoughts? Also, people often talk about HL being creditor focused and bs /laz debtor focused - what would that mean for the day to day job? I assume more legal stuff on the creditor side and industry analysis on the debtor side? Cheers all

16 Aug 2012

I was just shown this site by a friend. With the amount of misinformation on here, I thought it reasonable to field some questions while I'm on vacation. My background is two years at JPM SLF and now finishing my first year at Blackstone. I'm happy to answer anything about the process, lifestyle, pay, etc. from the UG level all the way beyond b-school (as best I can). Please keep your posts organized, and your questions concise. Fire at will.

06 Jun 2011

Hi everybody. I just got offered an internship in leveraged finance-loan syndication. I was wondering if you knew any books or things I could do to lessen the steep learning curve that probably awaits me. Thanks in advance!

18 Feb 2015