Hi all, What one is supposed to know for a possible internship role in Debt advisory? Thanks a lot for your help.
First thing is that debt is a bad thing that happens to people.
If you’re in the NYC area there’s an event on this topic on Thursday night at the NYSSA.
No,I am in London. needhelp- you need to revise you basic corporate finance. S
Be prepared to give a quick history of significant/watershed debt transactions that occurred throughout 2008 (issuer, instrument, size, why it’s important), together with a current market overview (minimally, broken out by credit rating (IG/HY) and sector).
Know the basis of the bankruptcy code. -Chpt 11/Chpt 7 -Priority of claims (i.e. secured creditors vs unsecured creditors) -Basic leverage finance jib jab (leverge/coverage ratios)…company x can leverage up 2x through 1st lien, 4x through 2nd lien/suborinated and the rest with equity.
Accounting and modeling are key, especially on the debtor side, at the entry level.
what does restructuring role specifically involves?
Depends on the shop. Outfits like Blackstone, Lazard HLHZ do a lot of debtor side advisory. Roles range from capital raising, pre/post chapter 11 advisory etc… The consulting shops (FTI, Alvarez & Marsal, AlixPartners) to a lot of turnaround and creditor-side advisory. Creditor-side advisory is really limited to figuring out potential recovery rates. As an analyst/associate, roles involve building financial models involving various potential cap structures, putting together reports and pitches.
salvaNJ Wrote: ------------------------------------------------------- > Depends on the shop. > > Outfits like Blackstone, Lazard HLHZ do a lot of > debtor side advisory. Roles range from capital > raising, pre/post chapter 11 advisory etc… > > The consulting shops (FTI, Alvarez & Marsal, > AlixPartners) to a lot of turnaround and > creditor-side advisory. Creditor-side advisory is > really limited to figuring out potential recovery > rates. > > As an analyst/associate, roles involve building > financial models involving various potential cap > structures, putting together reports and pitches. I thought it was the other way around, where the banks did creditor side and the consulting shops did debtor side (for the most part). I know with Alvarez & Marsal that they do both the financial restructuring stuff as well as some temp operational stuff for the debtor. So a VP would serve as a temp Controller and an Associate would be the temp head of A/P. 50 wks of travel.
Thats a turnaround advisory. In the event of a Chapter 11, an IB would also be brough in to do capital raising. Non of these shops (A&M, FTI Alix) have a capital markets group capable of doing this. So in many situations, during a reorg, you have three service providers in the mix: the turnaround guys, legal and bankers. At a minimum you will have legal and bankers.