05 Credit Sights How the Markets Work: Key Players & Primary vs Secondary

Investment Bankers (Coverage)

Advise on capital markets access, M&A.

Capital Markets & Syndicate Teams

Advise on market conditions, structure new bond deals, and liaise with buy-side investors.

Corporate Bankers

Manage direct loans to large corporates.

Risk Management

Approves and monitors loan exposures.

Debt Capital Markets (DCM)

Focus on investment grade bonds.

Leveraged Finance (Lev Fin)

Focus on high-yield bonds.

Syndicate

Interacts with buy-side to price and allocate new bonds.

Sales

Manages client relationships and facilitates trades.

Traders

Take trading risk and execute buy/sell orders.

Desk Analysts

Support trading with bond-specific analysis.

Publishing Research

Analysts cover equity, credit, macro, FX, etc.

Wealth Management & Private Bank

Serve retail to ultra-high-net-worth clients.

Asset Management Arms

Operate similarly to buy-side firms.

Buy-Side

Includes insurance companies, pension funds, hedge funds, asset managers, corporates, and government entities.

Life Insurers

Long-only investors; buy and hold long-dated bonds.

Asset Managers

Invest client money, often in separately managed accounts (SMAs).

Hedge Funds

Flexible strategies including long/short, event-driven, distressed, macro, etc.

Pension Funds

Manage assets for future retiree payouts.

Government Entities

Invest public funds in safe, short-term bonds.

Corporates

Can both borrow and invest; often manage large cash reserves in-house.

Chief Investment Officer (CIO)

Oversees strategy, allocation, fundraising.

Portfolio Managers (PMs)

Run investment strategies by asset class.

Traders

Execute trades and relay market intel.

Research Analysts

Generate investment ideas, assess risk, know sectors.

Sales/Product/Investor Relations

Ensure capital inflow and communication.

Primary Market

• Companies issue new bonds via banks.

• DCM and syndicate coordinate pricing and allocation.

• Investors place orders and confirm pricing before issuance.

Secondary Market

• Investors trade previously issued bonds.

• Broker-dealers facilitate trades for a spread/fee.

Which team within the sell side is responsible for advising on market conditions and working with end investors?

• Corporate bankers

• Syndicate team

• M&A advisory

• Risk Management

• Syndicate team

What is the primary role of the Chief Investment Officer (CIO) on the buy side?

• Executing trades and providing market color

• Generating ideas and managing positions in a portfolio

• Facilitating buying of bonds in the primary market

• Fund performance management and allocations

• Fund performance management and allocations

Which factors are part of Fitch's four-step analytical framework for ratings?

• Purpose

• Payback

• Market Demand

• Structure

• Purpose

• Payback

• Structure