| name | credit-memo-template |
| description | Branded credit investment memo template with required sections, formatting guidelines, and compliance language for leveraged credit analysis |
Credit Investment Memo Template
Overview
This skill provides the standard template for generating credit investment memos. Every memo must follow this structure and include all required sections. The agent should use this template when assembling the final memo from research, data, and calculation outputs.
When to Use
Use this template when you have gathered all research, data, and calculations and are ready to assemble the final credit investment memo document.
Required Sections
1. Executive Summary (1 paragraph)
Lead with the recommendation (Buy / Pass / Monitor). State the borrower name, deal type, deal size, and the single most compelling reason for the recommendation. Keep it to 3-5 sentences.
Example tone: "We recommend participating in the $550M Term Loan B for Acme Corp (BB-/Stable). The credit benefits from a diversified industrials platform with consistent deleveraging, though automotive exposure warrants monitoring."
2. Business Overview (2-3 paragraphs)
Cover:
- What the company does, key products/services, end markets
- Revenue scale, employee count, geographic footprint
- Market position and competitive advantages
- Management team quality and tenure
- Ownership structure (PE sponsor, public, family-owned)
3. Capital Structure (1-2 paragraphs + table)
Detail:
- All outstanding debt instruments (revolver, term loans, bonds, mezz)
- Maturity profile and upcoming maturities
- Covenant summary (maintenance vs. incurrence)
- Secured vs. unsecured breakdown
- Any upcoming refinancing needs
4. Key Credit Metrics (table format)
Present in a two-column table (Metric | Value):
- Total Leverage (Debt/EBITDA)
- Net Leverage ((Debt - Cash)/EBITDA)
- Interest Coverage (EBITDA/Interest)
- Free Cash Flow
- FCF Yield (FCF/Debt)
- Revenue Growth (YoY %)
- EBITDA Margin (%)
- Debt/Total Capitalization
5. Industry Analysis (2-3 paragraphs)
Cover:
- Sector growth drivers and headwinds
- Competitive landscape and market share dynamics
- Regulatory environment
- Cyclicality and where we are in the cycle
- How this borrower is positioned vs. peers
6. Downside Scenarios (table + narrative)
Present three scenarios with key metric impacts:
- Base Case: Current trajectory continues
- Downside Case: EBITDA -20%, revenue -10%
- Severe Downside: EBITDA -35%, revenue -20%
For each scenario, show: resulting leverage, coverage ratio, and whether the credit can service its debt. Identify the "break" point — at what level of EBITDA decline does the credit breach covenants or run out of liquidity.
7. Recommendation (1-2 paragraphs)
State clearly:
- Buy / Pass / Monitor with conviction level (High / Medium / Low)
- Key factors supporting the recommendation
- What would change the view (catalysts to watch)
- Suggested position size and risk rating
8. Sources & Citations
List all sources used in preparing the memo. Group by type:
- Public Sources: News articles, filings, rating agency reports
- Internal Sources: Prior credit reviews, committee notes, analyst memos
- Data Sources: Internal deal database queries, portfolio data
Formatting Guidelines
- Use professional, concise language — no jargon without definition
- All metrics should include units (x for multiples, % for percentages, $MM for dollars)
- Tables should have clear headers and consistent formatting
- Avoid hedging language — be direct in the recommendation
Required Compliance Disclaimer
Every memo MUST end with this disclaimer:
"This memo is for internal use only and does not constitute investment advice. All analysis is based on publicly available information and internal firm data. This document may contain forward-looking statements subject to risks and uncertainties."
