Prepare for or enhance a career investing in the credit markets with this authoritative guide.
The leveraged credit market is currently valued at over $4 trillion and is one of the fastest-growing asset classes, fueling demand for well-trained credit analysts.
The Credit Investor's Handbook: Leveraged Loans, High Yield Bonds, and Distressed Debt is the definitive guide for young investment professionals embarking on a career investing in the leveraged credit markets – whether public, private, performing, or distressed. Experienced professionals will also immensely benefit from this guide as they refine their investment skills.
Michael Gatto has twenty-five years of investing experience in the debt markets at Silver Point Capital (a $20 billion credit-focused fund) and Goldman Sachs' Special Situations Group. Furthermore, he is an adjunct professor at Columbia Business School and Fordham University's Gabelli School of Business. Michael brings these experiences together in this comprehensive manual, teaching the skills to succeed in the dynamic and complex credit markets. Michael brings highly complex case studies to life using decades of his first-hand war stories and combines them with reflections from leading industry professionals, often infused with humor, to make the book accessible, readable, and fun.
Michael's seven-step credit analysis process will prepare you for a career in credit investing at the top buy-side and sell-side firms on Wall Street by teaching you the technical skills needed to invest in the debt markets. Whether you are analyzing a loan origination in the private debt market, a new issue of a broadly syndicated loan (BSL), a high-yield bond (HY), or a secondary trade, the comprehensive knowledge gained from this book will equip you to make well-founded investment recommendations. Additionally, an entire section devoted to distressed debt investing incorporates a practitioner's perspective on the nuances of bankruptcy and restructurings to develop strategies to profit from opportunities in this opaque market. In clear, straightforward terms accessible to the layperson, Michael explains strategies pursued by distressed companies such as J. Crew and Serta that have led to creditor-on-creditor violence, giving you an insider’s perspective on some of the least understood transactions in the distressed arena.
You will:
Gain In-Depth Knowledge: Understand the complexities of credit markets, from trading dynamics to historical credit cycles, allowing you to identify debt investment opportunities—and avoid pitfalls.
Master the Analytical Framework: Learn Michael's seven-step process for analyzing credit investments, including qualitative industry and business analysis, financial statement analysis, forecasting, corporate valuation, relative value analysis, and debt structuring.
Learn How to Write an Investment Recommendation: Review real-life credit memos to understand how analysts translate this framework into recommendations that drive investment decisions at the top credit funds.
Discover Key Concepts and Terminology: leveraged buyout financings (LBOs), trading levels (price, yields, and spreads), shorting, and credit default swaps.
Navigate Distressed Debt: Explore the strategies and nuances of distressed debt investing, including bankruptcy, subordination, creditor-on-creditor violence, and high-profile case studies from the past three decades of Chapter 11 restructurings.
This book caters to finance majors pursuing investing careers, credit analysts seeking to enhance their skills, and seasoned professionals aiming to expand their expertise. Professors, researchers, lawyers, and advisors servicing the credit industry will also find immense value in this comprehensive guide.
Introduction: Structure of the Book --- PART ONE BUILDING BLOCKS OF THE LEVERAGED CREDIT MARKETS --- Chapter 1 Description and History of the Leveraged Finance Markets --- Chapter 2 Credit Cycles --- Chapter 3 A Primer on Leveraged Credit Trading Terminology --- Chapter 4 A Primer on Leveraged Buyouts (LBOs) --- PART TWO THE SEVEN- STEP PROCESS OF EVALUATING A DEBT INVESTMENT --- Chapter 5 Step 1 of the Credit Analysis Process: Sources and Uses --- Chapter 6 Step 2 of the Credit Analysis Process: Qualitative Analysis --- Chapter 7 Step 3(a) of the Credit Analysis Process: Financial Statement Analysis— Profitability --- Chapter 8 Step 3(b) of the Credit Analysis Process: Financial Statement Analysis—Cash Flow and Liquidity --- Chapter 9 Step 3(c) of the Credit Analysis Process: Financial Statement Analysis— Capital Structure --- Chapter 10 Step 4 of the Credit Analysis Process: Forecasting --- Chapter 11 Step 5 of the Credit Analysis Process: Corporate Valuation --- Chapter 12 Step 6 of the Credit Analysis Process: Structuring and Documentation --- Chapter 13 Step 7 of the Credit Analysis Process: Preparing an Investment Recommendation and Credit Committee Memo --- PART THREE DISTRESSED DEBT INVESTING --- Chapter 14 Introduction to Distressed Debt Investing --- Chapter 15 Bankruptcy --- Chapter 16 Bankruptcy Fights --- Chapter 17 How Subordination Works in Bankruptcy --- Chapter 18 Liability Management and Creditor- on- Creditor Violence --- Chapter 19 Making Money in Distressed Situations --- Closing Comment --- Chapter 20 My Closing Comment.
