Leveraged Loans

Hi all! I was curious to learn more about the debt fund or direct lending recruitment process, if it's on the same timeline as PE, and what to expect in the process. Currently, I'm at a BB group that specializes in underwriting leveraged loans (mostly sponsor deals, acquisition financing, and recapitalizations), which includes a lot of work in exchanging and negotiating grids and credit documents with the client. It doesn't involve any modeling. Can anyone please shed some light on where I would stand or what the process looks like in general?

26 Aug 2019

Can anyone explain how hedge funds that invest in bank debt earn outsized returns? With the informational asymmetry that exists between these hedge funds and the originating lenders, as well as the former's inability to leverage returns by funding off low cost deposits, I cannot see how the funds would consistently beat the returns of the originating lenders, let alone generate any significant alpha. Are these funds essentially just betting on interest rates (or maybe conducting some kind of rate arbitrage) and using floating-rate instruments - leveraged loans, or bank debt - as vehicles to conduct that strategy?

22 Oct 2013

Hi all, I have an interview within the bank loans group at an asset manager next week. I know the term structures are mostly set at floating rates and are extended to corporations that are non investment grade. Im curiouse as to the due dilligence process that goes into pricing these rates. Do they use WACC or comparable companies with same credit ratings? Thanks in advance.

14 Jan 2009

As this is often debated on the trading floor - why not do an open forum on WSO as well... Submit your antonym to the phrase, "balls long."

22 Apr 2011

what does the leverage loan market have that HY doesn't?

18 May 2011

Hi I'm interviewing with a CLO loan shop with a BDC out in New York and was wondering what the career progression is and if there is flexibility in this type of product. I know that distressed funds tend to recruit people from high yields and sell side leveraged finance. I'm just wondering if investing in leveraged loans is pigeon holing myself since it's a lower risk product. I have experience in equities but want to see what the exit options for this type of role is.

19 Aug 2016

Tonight, February 25th, at 8:00pm ET, Wall Street Mentors will be hosting a webinar focused on leveraged loans, a key component of private equity financing. The webinar will be hosted by WSO mentor Joe, an industry veteran with experience in private equity coverage, leveraged finance, and investing. He's an absolute master of leveraged finance and loves passing his knowledge on to eager audiences. If you have any interest in Private Equity or leveraged finance, you should definitely join us on Tuesday night. CLICK HERE to access it when the time comes. Read on for more details on what you can

25 Feb 2014

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11 Dec 2014

I was hoping someone could help me figure out how to calculate the yield of a loan with a less than 4 year average life. I'm trying to build out a formula in excel that will calcualte the yield from a database. It's basically back of the envelope, but what I have so far is the spread + LIBOR floor and every point of OID off par equaling roughly 25 bps. So a loan at L+300, with a 1.00% floor at 99 would yield 4.25%. The problem with the above is that it doesn't take into account OID for a loan with 2or 3 years. Does anyone have any input into how I could do this better? Thank you for your time

05 Mar 2013

WSO fam - I've been working in a middle office operational role for the past ~1.75 years at a Top Tier BB for the LevFin Capital Markets/Syndicate group. I specialize in loans and have been awarded with great transaction experience, connections within our market making/sales/syndicate groups, and product knowledge (specific to leveraged loans). I was recently perusing through LinkedIn and saw a position for a Junior Loan Trader for a $10bn HF that had the "LinkedIn Easy Apply" button. Figuring that there's no harm in shooting out an application with about 3 clicks, I applied to the role. I got

26 Oct 2019

Hi all, Hopefully you can share some knowledge with the community. Looking for some guidance that will help me progress in my career and move in to trading leveraged loans and other fixed income products. I supported the par and distressed trading desks at a BB for a few years (but I was at a satellite office so I didn't get much exposure to the trading desk, I was in operations), but since then ive moved to a credit fund with increasing AUM where I sit on the desk with the PM's, and Ive learnt a lot more about the market from being closer to the execution side and decision makers. This has

23 Jun 2018

What are people's thoughts on the recovery path for the HY and LL markets (2021-2023). Are there still pockets of value? Keeping the question broad but would love to hear from those in the opportunistic credit space

04 Apr 2021

I'm curious, how is the work at the junior level different in leveraged loan investing (buy side) vs levfin (sell side)? Are you still directly involved in the transaction process on the buyside? And finally, what would some exit opps be from doing lev loan investing at a relatively no name fund (<$50bn aum)? Would it be possible to lateral into a larger fund like Carlyle/Ares, or move to the private side aka direct lending?

05 Feb 2021

Just curious about the implications of both career-wise. Which is seen as more lucrative or is there not much of a difference?

04 Feb 2021

Hi Does anyone have experience buyer or selling leveraged / syndicated loans on the secondary market? I have some questions on how they are facilitated (through trade desk versus broker). Thanks!

04 Feb 2021

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

Been with a large corporate pension ($30B+) for two years with heavy exposure to all asset classes although I am lead on long biased credit funds (securitized, HY, and leveragedd loan mandates). For three years before this I was both a corporate financial analyst/credit portfolio manager simultaneously at a small bank and have pretty solid excel modeling background. Also have the CFA but non-target undergrad and no MBA. Looking to exit in the near term and would like to join a high yield/levered loan fund or CLO manager as an analyst. Any advice on how to get in given my path would not be

28 Jul 2020

Just wondering if anyone can give me info on the following: What is the general European leveraged loan market like? There have been several regulations after the crisis like Basel III etc. how have these regulations affected the leveraged loan market in Europe? Thanks!

05 Mar 2014