Monday, July 22, 2013

A day in the life of ... A Credit Analyst

Credit analysts track various sovereign, quasi-sovereign or corporate credits (i.e. companies). They model the names they track along various accounting metrics to determine how the companies are currently performing, and how they might perform under different market conditions. They advise portfolio managers on what credits to buy and which ones to sell and when. Good credit analysts are able to anticipate market moves before they happen and steer portfolios to tidy gains while avoiding losses. Credit analysts tend to be very busy during equity earnings season (yes, even though they work in the corporate bonds space), and with new or potential new issues.

This is what a typical Credit Analyst's day might look like:

0700: get to work, track major market news stories and overnight 

0800: participate in the morning meeting with all other analysts 
      and portfolio managers present recent happenings in your 
      sectors, names you cover, market news items of interest. 
      discuss any relevant holdings in portfolios, summarize key 
      ideas for either increasing or decreasing exposure in 
      particular companies

0900: if on the sell side confer with other analysts that cover 
till  the same name or attend scheduled meetings or conference 
1100  calls with management from companies you cover. ask 
      pertinent questions to firm up your investment theses

      if on the buy side, talk to sell side analysts that cover 
      the same name or credit, ask for trade ideas either in 
      terms of relative value or others, and form firm 

1100: read research on companies, track market events to 
till  evaluate trade ideas factoring in portfolio holdings. keep 
1500  aware of new issuances from either companies you hold or 
      in sectors you cover. pay special attention to M&A     
      activity as well.

1500: pitch your trade and holdings ideas to portfolio managers. 
till  clarify views on your credits etc. it usually helps to put 
1600  out a note on names you cover daily before leaving work 
      with major news items and impending news stories. for new 
      issues, might want to advise portfolio manager on 
      allocations to put in for.

1600: build models for the companies you cover, test them with 
till  various scenarios if working on regional credits, might 
1800  also want to model various fat-tail events to determine 
      how credits might behave

1800: work on daily commentary, send it out, head home