This week we chat with Derek Gluckman, a vice president and senior covenant officer at Moody’s. Derek is responsible for research on the Covenants team. He’s been at Moody’s since 2015. Prior to that he was a corporate attorney at Orrick, Herrington & Sutcliffe. 

The Lead Left: Derek, thanks for making time for us today. You’ve written extensively about covenants in the leveraged loan market. Give us some perspective on what that means at Moody’s.

Derek Gluckman: I sit on our covenants team. We have nine people globally, most of them in New York. Seven of our professionals focus on high-yield bonds, and two on leveraged loans. Our senior staff is made up of attorneys. We were outside counsels who in many cases helped negotiate these credit agreements and bond documents. I have to say this is a very unique role at Moody’s.

TLL: How are you different from Covenant Review or Xtract?

DG: We provide something different. Our team sits in the corporate finance ratings division at Moody’s which means we get to integrate our research with other teams including those focusing on general leveraged finance research, default and recovery research and liquidity analysis. We work together closely and talk a lot, and work with our corporate ratings teams as well. These resources allow us to offer a really unique research product that integrates many different views of the market. We also operate under a different time-frame. While our bond product reviews basically every rated bond at the time of issuance, we can’t tackle every loan in the market and require financials for our review so we typically wait until the financials are filed, unless there is a concurrent bond offering available.

All of this gives us a unique perspective that other shops or banks can’t put together. It’s a better gig than being a lawyer.

TLL: What kind of innovative things are you doing?