Careers

in
Credit Research and
Analysis

Confidential, Copyright AIWMI

AIM of this presentation

To define the Credit Research Market & the
services.
Provide an idea of its size and recent growth
Examine the career opportunities in the Credit
Research industry
Describe the competitive landscape and the ways
to reach there.
Introduce CCRA Certification program as a
gateway to careers in Credit Research and Ratings

Confidential, Copyright AIWMI

Definition of Credit Research and

Analysis
Credit Research and Analysis
Research to assess the overall credit quality for
Investments into its fixed income related instruments
Fixed Income is an Investment that has an up-front
capital Investment and pays interest on a regular basis
Credit research usually includes credit analysis, fixed
income valuation, credit rating. credit assessment,
formulating credit strategy and credit enhancement

Confidential, Copyright AIWMI

Fixed Income - Products

Common financial instruments:

Bonds/Debentures
Certificates of Deposit, Fixed deposits
Money Markets Instruments (short term)
Loans (including foreign current loans)
Others

Confidential, Copyright AIWMI

As we understand.
Credit Analysts has to look at all the risk
factors for a company unlike equity
analysts
Credit Analysts can be a qualified person
with appropriate credit knowledge like
MBAs, CFA Charterholders, Chartered
accountants,
Graduates
or
any
credentialed
professional
money
manager.
Confidential, Copyright AIWMI

Client Segments

Credit Research roles are targeted at

any part of business where there is a
need for new capital for e.g. for
SMEs, large corporates, private
companies, special purpose vehicles,
individuals
The roles could be targeted for
independent analysis like a credit
rating analyst or a portfolio analyst
for a buy side/sell side firm
Confidential, Copyright AIWMI

Depth of Credit Research

Source : http://www.zerohedge.com/news/visualizing-tbtf-hub-and-spoke-representation-scale-free-modern-banking
Confidential, Copyright AIWMI

Equity is over played

There areonly 51 stocks in the
worldthat arerated by more than 50
sell-side equity research analysts. Of
these49 are in India. Theonly 2 stocks
outside India are Apple and Intel. (MS
Report).
Equity Research per se has bulk supply
and few jobs which is inverse compared
to the total capital out in the world
Confidential, Copyright AIWMI

Market Structure/size
Bond market Size global - $123.2 tn (BIS
Dec 2012)
CDS market size globally - $27 tn (BIS June
2012)
Equity market size globally - $50 tn
Globally equity is only about 25% of the
total capital available while debt remains
75%.

Much Ado about Nothing

Market Players for Credit

Credit Rating Agencies like CRISIL, ICRA, CARE,
FITCH, Moody's, S&P
Credit Information Companies like CIBIL,
Equifax, Experian and Highmark
Banks/NBFC Retail and institutional Credit,
Other loans
Banks Treasury dept. buying and selling G-sec
MNC Banks Fixed income trading desks,
Research
KPOs Tracking international Bond markets
Confidential, Copyright AIWMI

CCRA Competitive Landscape

Global
Players

Ratings

Indian
Players
High

Capabilities
Confidential, Copyright AIWMI

Source : logos are taken from respective companies website and are not for marketing purpose.

High

Submit
Submit
Jobs
job title,
city,
state

Salaries

Confidential, Copyright AIWMI

Recent Regulatory updates

NSE Launched its Debt trading segment

recently and trying to promote it, other key
exchanges are planning as well

RBI Announced/approved CDS Guidelines in

2012 and all regulators including PFRDA, IRDA,
SEBI etc. allowed mutual funds to trade in the
same

RBI is actively changing competitive landscape

for debt/debentures etc with changing
guidelines, rules

Recently around 20+ corporates applied for

banking license
and that will open up banking
Confidential, Copyright AIWMI
jobs plus Nationalized banks are expanding

Present Market Scenario

JP Morgan: Credit Research

Each Credit Research senior analyst focuses on

one or more industries, comprising anywhere from
30 to 70 companies.
Analysts use knowledge of the industry, the
companies and the fixed income market to issue
bond and credit derivative recommendations.

Copal Partners A Moodys Company

The role is ideal for someone who is a domain

expert on one or more sectors and wants to move
from being an analyst to a manager.

A key longer term component of this role is also to

structure and devise a rule based Artificial Intelligence
system that can automate Research output.
Confidential, Copyright AIWMI

 Fidelity Fixed Income/Credit Research

This division is home to Portfolio Managers,

Research Analysts, Traders and Quantitative
specialists.
And they work on either the Equity side (stocks) or
on the Fixed Income side, otherwise known as Credit
(bonds, gilts, and so on).

Career Opportunity at AMBA Research :

Standard Chartered Credit Research

ANALYST/ ASSOCIATE VICE PRESIDENT - FIXED

INCOME AND CREDIT RESEARCH

The Global Credit Research team, headed by Kaushik

Rudra, comprises two areas: Credit Analysis and
Credit Strategy
PIMCOs approach of Credit Research for a better
Investment
Confidential, Copyright AIWMI
CRISIL

Role of a Credit Analyst

Long Hours (less hours than Investment Banking)
Life will revolve around companies
A lot of phone time / meetings with clients, other banks, lawyers, &
internal colleagues
Credit analysis
o Financial Statement Analysis / Modeling and Industry Studies
Must know your clients better than the competition
o Investor Calls / Presentations
o Company press releases as well as reports in the media
o 10-Ks, transcripts, sell-side research etc.,
Broad product experience / limited understanding of each product
Competitive / High Pressure Environment
o Can be said about any position at a bank. Especially front office but
also middle and back.

Confidential, Copyright AIWMI

Career Considerations
Analyst Role / Responsibilities

Financial analysis and financial modeling

Company valuation
Comparable analysis
Preparation internal credit / approval memos
Industry and company research
Developing client presentations
Marketing material (i.e. Teaser, Confidential Information
Memorandum)
Updating all internal databases and systems
Administrative tasks (set up calls, fax, FedEx, etc.)

Career / Role Benefits

Career Options Firm Types

Commercial banks
Finance companies / specialty funds
Hedge funds and mezzanine funds
Rating Agencies etc
Trading Desks

Banking-like training programs

Greater access to superiors & senior management
Truly understand corporate growth, financial analysis &
capitalization
Develop strong knowledge of many industries
Analysts tend to wear more hats than in larger banks
Quality of life: Hours, flexibility, goals & expectations
Defined career paths & competitive compensation
Opportunity to change career path both internal /
externally
Introduction to numerous business owners

Environment Work / Life Balance

10-12 hour days, weekend work depending on firm

Medium/High stress levels: Pressure to perform,
competitive environment & demanding superiors with
little room for error
Multiple deals / companies / projects at one time
Work frequently with others in deal teams of 2 4
people within your group
Frequent fire-drill deadlines for client driven approvals
Frequent meetings & conference calls throughout the
day

Confidential, Copyright AIWMI

Association of International Wealth

Managers
(AIWMCM )
Based in Switzerland, Non-profit Association
established in 2007 to promote & strengthen
global education in private banking industry
AIWM is affiliated to Swiss Financial Analysts
Association (SFAA). SFAA is a global forum for
financial analysts and was set up in 1962.

Confidential, Copyright AIWMI

Association of International Wealth

Managers
(AIWM)

Association founded by:

AZEK , founded in 1990, the Swiss Training
Centre for Investment professionals
LawInContext, online legal & training service
created by global law firm Baker & McKenzie
Central Law Training(CLT), UKs leading
provider of postgraduate legal training &
course provider of renowned STEP Diploma
in International Trust Management.
Confidential, Copyright AIWMI

AIWM Member Nations

Currently present in Switzerland,
France,
United
Kingdom,
Germany, Italy, Luxemburg ,
Hong Kong & Monaco.
Recently launched in South Asia

Confidential, Copyright AIWMI

Role of AIWM India

Assists
graduates
in
acquiring
core
competencies in finance & in qualifying for
key positions within the industry
Established to set a globally recognised
standard for the qualification of wealth
management & Credit Research professionals
Facilitates clients access to first-class,
reliable and comprehensive advice & services.

Confidential, Copyright AIWMI

AIWM Indias Objectives

To facilitate research & high quality education in field of
international wealth management & credit research.
To provide an internationally recognized certifications in
private banking (CIWMCM) & Credit Research (CCRACM)
To create a forum for the interchange of ideas and
information in the finance and wealth management
field
To assist a world wide network of private banking
experts & financial analysts

Confidential, Copyright AIWMI

Certified Credit Research

Analyst (CCRACM ) Program
Advanced international professional certification
for credit research professional, developed by
industry experts.
Has corporate acceptance
Global, regional and local education component
Program
developed
by
highly
qualified
academics & practitioners; skilfully combines
both theory & practice
Confidential, Copyright AIWMI

Strengths of CCRA
Program

CM

Ensures an in-depth knowledge of Credit

Research and Credit Strategy
Focuses on Credit Analysis
Provides access to rating methodologies,
industry practices
Teaches sophisticated techniques & takes
holistic approach to a Credit Ratings,
Analysis and Research

Confidential, Copyright AIWMI

Profile of Aspirants for the

CCRACM Program

Candidates aspiring for a career in the following domains should pursue

CCRACM program:
Credit Analysis
Credit Ratings
Commercial and Retail Finance
Investment Banking
Private Equity
Private Banking
Banks
Economic Research
Portfolio Management
Fund Management
Academics

Confidential, Copyright AIWMI

CCRACM Examination
Structure
The designation combines a topic-based
and levels-based approach
Both progression and topic specificity
are present
There are two levels of examinations
covering all topic areas

Confidential, Copyright AIWMI

CCRACM Examination
Structure
Level 1 tests
Knowledge and understanding
Problem solving

Level 2 tests
Problem solving
Evaluation and judgemental skills

Confidential, Copyright AIWMI

CCRA Examination
Structure
CM

Examination paper structure:

Common Exam hours No. of papers
Level 1
Level 2

2
3
5

Confidential, Copyright AIWMI

1
1
2

CCRACM Examination
Structure
Examination paper structure:
Common
Level 1& 2

Exam Schedule
Online NSE Exams

Confidential, Copyright AIWMI

CCRA Examination
Structure
CM

Topic areas Level 1

Understanding of Financial Statement Analysis
Balance Sheet, Profit & Loss Statement, Cash-flow, Ratio & its
analysis, Accounting Policies, Projections, Red Flags

Credit Specific Analysis

Liquidity Analysis, Stress Case Testing, Scenario, Base, Bear
Bull, Covenant Testing with Projections, Comparison- Sector vs.
Global, Liquidation Scenario, Event, M&A, LBO

Understanding of Bonds/ Bond Maths

Bonds, Covenants, Pricing, Spread, Curves, CDS, Seniority
Ranking, Rich Cheap Analysis, SWAP, OAS, YTW, Term Structure
& its theories, Duration, PVBP

Confidential, Copyright AIWMI

CCRACM Exam Structure

Topic areas Level 2

Credit Ratings Basics

4C Model, Types of ratings, Default rates, Recovery rates, Business,
Industry, Financial and other risks, Scenario Analysis, Sovereign
Ratings, Methodology, CIBIL/FICO
Credit Strategy
Pair trade, Basis trade, Rating Analysis Trends, Sectors, etc., Debt
maturity profile, Retrace analysis, Sector charts, Efficient frontier,
Commodity based traders, FX-based correlation, Senior vs. sub,
CDS trader Analysis, Company charts
Credit Enhancement : Structuring, Types of enhancement
Others : Related party transactions, Management analysis, Overview
of fixed income markets around the world, Distressed Investing

Confidential, Copyright AIWMI

Pathway to CCRA
Certification

CM

Eligibility Minimum Work Experience N.A

Minimum Qualification during
Certification Graduation
(Students of final year of
graduation can register)

Confidential, Copyright AIWMI

Conclusion

Credit Research Analysis will always be a critical function

for financial institutions.
The market is growing with the entry of various institutions
& products. Credit Analysis in this scenario provides a true
differentiator and sustainable competitive advantage.

Confidential, Copyright AIWMI

Queries

Thank You
Association of International Wealth Management India
(AIWMI)
Regus, Level 9, Platina, G Block, Plot C-59, BKC, Mumbai-51
Email: info@aiwmindia.com Web: www.aiwmindia.com
Confidential, Copyright AIWMI