Basic, lesson 1 of 3
What the credit case is and how it is graded
A credit case asks one question: would you make this loan, and on what terms? Reviewers grade the answer and the judgment behind it more than the spreadsheet.
8 min, 3 checks
1The formats
Most direct lenders and credit funds give a case at the superday or just before it. The shapes vary, but three are common.
| Format | What you get | What you hand in |
|---|---|---|
| Take home | A teaser or CIM extract and a few years of financials, two to five days | A short model and a two to four page memo or a few slides |
| Timed model | A data pack and two to three hours in an office or on a shared screen | A working model with a debt schedule and cases, plus a short write-up |
| Paper case | A one page fact sheet in the interview itself | A spoken recommendation with leverage, coverage, and a downside done by hand |
In each one, the deliverable is a recommendation. Lend, lend with changes, or pass, and why. A model with no answer at the top scores worse than a simple model with a clear, defended call.
Check 1
You have 20 minutes left in a timed case and your downside tab is unfinished. What is the best use of the time?
2What reviewers look for
- A recommendation on the first page, with the amount, the price, and the two or three terms that matter.
- A downside you built yourself, not the sponsor's plan with a haircut on every line.
- Leverage, coverage, and liquidity tracked year by year in every case.
- Risks named specifically, each with a mitigant or an admission that there is none.
- Assumptions labelled, so a reviewer can tell a judgment call from an error.
The usual failures are the reverse: a model that only runs the sponsor's case, a memo that reads like a company description, and risks that are generic ("macro uncertainty") rather than tied to this business.
Check 2
Which risk statement would a reviewer rate highest?
Check 3
The data pack has no capex history. What should you do?
Terms in this lesson: Superday, Confidential information memorandum, Sponsor, Capital expenditures.
3 checks in this lesson. Sign in to keep your progress.