The Credit Investor's Handbook: Leveraged Loans, High Yield Bonds, and Distressed Debt - Hardcover

by Michael Gatto (Author)

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.

Front Jacket

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. However, there is a dearth of, if any, comprehensive resources for young professionals seeking to understand this exciting asset class better. The Credit Investor's Handbook: Leveraged Loans, High Yield Bonds, and Distressed Debt by Michael Gatto fills this void by providing a definitive guide to investing in the leveraged credit markets--public, private, performing, and distressed.

Michael's seven-step credit analysis process, developed over 25 years of investing alongside some of the world's best credit investors, will prepare you for a career at the top buy-side and sell-side firms on Wall Street. Whether you are analyzing a loan origination in the private debt market, a new broadly syndicated loan, high yield bond issue, or a secondary trade, this book will equip you with the knowledge to make well-founded investments and avoid common analytical mistakes.

Additionally, aspiring credit analysts will learn, from a practitioner's perspective, profit-maximizing strategies specific to distressed debt investing, including those relating to bankruptcies and restructurings.

You will:

• Gain In-Depth Knowledge: Understand the complexities of credit markets, from trading dynamics to historical credit cycles, allowing you to identify profitable 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 metrics, financial statement analysis, forecasting, corporate valuation, relative value comparisons, and debt structuring
• Learn How to Write an Investment Recommendation: Reviewreal-life credit memos to understand how analysts translate this framework into recommendations that drive investment decisions at the top credit funds
• Navigate Distressed Debt: Explore the strategies and nuances of distressed debt investing, including high-profile case studies from the past two decades of bankruptcies and restructurings

The Credit Investor's Handbook caters to finance majors aspiring to build successful careers in the credit markets, newly minted credit analysts seeking to enhance their skills, and seasoned professionals looking to broaden their expertise. Moreover, professors, researchers, lawyers, and advisors servicing the credit industry will find immense value in this comprehensive resource.

Back Jacket

PRAISE FOR THE CREDIT INVESTOR'S HANDBOOK

"Credit analysis is an underappreciated skill that is essential for investing a cross all asset classes, private and public. Michael's book is an incredibly detailed, step-by-step 'how-to' manual for analyzing credit investments, from performing to distressed, and understanding the complexities of the bankruptcy process."
--Joyce Chang, Chair of Global Research, JP Morgan

"While there are many books on investing in equities, until now, there were virtually no comprehensive books on investing in debt. The Credit Investor's Handbook fills this gap. While the book is focused on the debt markets, its analytical approach is extremely relevant to equities investors. Furthermore, Michael's use of real-life examples and humor make it an enjoyable read. The Credit Investor's Handbook is a 'must-read'for anyone pursuing a career in research, investment banking, capital allocation, and, most importantly, investing in an ever-evolving global marketplace."
--Mario Gabelli, Chairman and Chief Executive Officer of Gabelli Funds

"The Credit Investor's Handbook is an extraordinarily comprehensive look at credit investment strategies. It is chock full of rich examples that are bound to be useful in assessing the credit excesses that will undoubtedly unravel in the years ahead. I wish someone had handed me a copy when I came into the business."
--Seth A. Klarman, CEO and Portfolio Manager, The Baupost Group

"When I got my pre-publication copy of The Credit Investor's Handbook, I turned first to the chapters on distressed debt investing. I found a very helpful, logically organized introduction to the process and some fascinating 'warstories.'Like all good investment books, The Handbook doesn't purport to be a how-to that will yield easy profits, but it does a great job of explaining the elements that must be mastered."
--Howard Marks, Co-Chairman, Oaktree Capital Management

"Michael's excellent book, The Credit Investor's Handbook, is like a traditional bank's training program on steroids. It offers the same kind of detailed, real-life grounding in financial analysis that was critical to my early success on Wall Street. The book teaches you the practical skills needed to succeed and steers you away from academic theories that don't work in the real world of credit markets. Michael is a great teacher with the unique ability to breakdown complex analysis into simple steps, making it easy to learn. He also brings the same passion and terrific sense of humor he uses in his classroom to the pages of this textbook. I highly recommend it as a 'must-read'for all up-and-coming credit analysts."
--Harvey Schwartz, CEO of the Carlyle Group

Author Biography

MICHAEL A. GATTO has twenty-five years of investing experience in the debt markets at Silver Point Capital(a $20+ billion credit-focused investment management firm) 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 all these experiences together, along with highly complex case studies, to define and teach the skills to succeed in the dynamic and complex credit markets. This comprehensive manual combines decades of Michael's firsthand war stories, often infused with humor, with reflections from leading industry professionals, making the book accessible, readable, and entertaining.