From Feast to Famine & Back Again: Investing in the Credit Markets through Cycles

This course studies the evolution of the high yield bond and loan markets, and the behavior of market participants from peak to trough and back again through various credit cycles. Through lectures, case studies, and guest speakers, we discuss through-cycle changes in valuation, structure, capital raising, liquidity and other investor considerations. To provide context, we will use the Caesars/Harrah’s 2006 leveraged buyout as a case study that illustrates each phase of the credit cycle. Four other case studies (HCA, NXP, Realogy and a contemporary case, TWTR) will be used to highlight the two extremes of the cycle (“feast” and “famine”), and how they build on the calmer (some might even say boring) phases of the credit cycle. Students should leave the course with an understanding of the concept of the credit cycle and the ability to identify peak and trough conditions and behaviors.