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Collateralized Bond Obligation (CBO) and Collateralized Loan Obligation (CLO) and Collateralized Debt Obligation Trusts (CDO)

CDOs look to make above average returns by making leveraged investments in a portfolio of high yield bonds or leveraged loans. It is primarily funded with debt (multiple tranches in a waterfall structure, where each tranche has different risk and credit ratings). Securitization teams in investment banks will be responsible for

Why Do Investment Bankers Work So Much?

This is a question that my then significant other asked me on the weekly/daily when I toiled as an associate at a prestigious white shoe firm back in the day. Alas, one day she decided that absence did not make the heart grow fonder and she left for a more

Do Investment Bankers Get Sick?

A few years back I was sitting at an investment banking panel interview for a student conference when someone raised their hand to ask a ridiculous question. So behind hundreds of students with cheap suits from Tip Top Tailors that fit poorly and the slightly more astute ones that got trendier,

Introduction to Convertible Securities

Convertibles are a widely used but somewhat esoteric avenue of finance for most students. Although covered in upper level fixed income classes, very few students go into investment banking thinking that they want to work in equity-linked markets - everyone wants to do Mergers & Acquisitions or Technology, Media &

Financial Institutions Group in Canada

Canadian Financials Landscape Financial institutions are an extremely important component of corporate Canada. Financial institutions make up 20% of 25% of the market capitalization of the TSX. This does not consider the non-public entities that are active in the capital markets, with major issuers of debt including pension funds and government

Common Oil and Gas Investment Banking Interview Questions

Are you interviewing for oil and gas investment banking (or any other energy finance related job - corporate banking, commercial banking/reserve based lending, commodity sales, corporate development, treasury)? You should always expect these questions to come up. This guide assumes a basic understanding of energy – we will not be

Investment Banking Credit Ratings Advisory

Brain Teasers

Credit Ratings for Blue-Chip Corporates Companies care about their credit ratings and may have certain targets. For instance, many companies have historically aimed to maintain an investment grade rating from at least one credit agency (BBB- for Standard and Poors or Baa3 for Moody’s). Blue-chip stocks that see widespread investor interest are

Activist Shareholder Defense

How Does the Market React to Activist Shareholders Even if the returns on stocks with activist campaigns are not necessarily always positive, generally the market reacts positively to initial news of an activist investor taking a sizable position in the stock. Although activist campaigns will disrupt operations as management will attempt

Activist Shareholders and Targeted Companies

Who Are Activist Shareholders or Investors Most investors are "passive investors"1. Passive investors, in the context of activist shareholders, are buy-side accounts (asset managers) that do not agitate for change by bringing up motions at shareholder meetings. Generally, when an institutional investor invests in a company, they are making a bet