{"id":186339,"date":"2019-06-24T11:05:10","date_gmt":"2019-06-24T05:35:10","guid":{"rendered":"https:\/\/staging-imarticus.kinsta.cloud\/?p=186339"},"modified":"2021-02-27T12:47:27","modified_gmt":"2021-02-27T12:47:27","slug":"what-modeling-skills-are-needed-for-an-analyst-working-in-debt-capital-market-blog","status":"publish","type":"post","link":"https:\/\/imarticus.org\/blog\/what-modeling-skills-are-needed-for-an-analyst-working-in-debt-capital-market-blog\/","title":{"rendered":"What Modeling Skills are Needed For an Analyst Working in Debt Capital Market?"},"content":{"rendered":"

At the very onset, let us tell you that one does not need to have extensive skills in modeling especially in a debt- capital- markets job role when working for such a firm. However, modeling skills will be required if your data needs cleaning, formatting and then analysis. Most firms use databases on equity research that are procured from other sources as well as in-house databases and the need for financial modeling is a bare minimum.<\/p>\n

It is important though to track the indices for outstanding debt, share repurchases, cash, pending acquisitions, etc. since they foretell debt retirement, future issuances and such which may be required when advising clients.<\/p>\n

Any capital market tutorial<\/strong>\u00a0<\/strong>should begin with answering questions related to what the DCM actually is. Most companies prefer to turn to DCM markets when they need funds for expansion but do not want to trade in their private ownership tag.<\/p>\n

The DCM market is ideal since they deal with the sale of units called bonds. For the investors in bonds, this is a fixed-income investment where on redemption they get their money back along with attractive interest. To explain this Capital Market Courses<\/a>\u00a0<\/strong>concept assume you buy a bond of 1000Rs face-value with a redemption date of 1 year.<\/p>\n

After a year the bond can be redeemed at 100Rs plus the interest rate which may vary. When bond prices fall the interest rate moves up and vice versa. If you get 1100 Rs your interest rate is 10% and is much higher than the FD rate of 6-7 %. The investment is low-risk and earns a fixed interest rate. Such funds are a short-term boon for firms needing funds for expansion without the dilution of ownership. It\u2019s a win-win deal for both.<\/p>\n

The different types of bonds:<\/strong>
\nThe bond types are risk-of-default related and can be categorized as<\/p>\n