A message from Octus: J.Crew, Xerox and Optimum walk into a restaurant...

LMEs aren't an off-menu option anymore. As balance sheets get squeezed and creative counsel finds new gaps in credit docs, the tactics are evolving faster than most investors can track. Uptier. Extend and exchange. Deal-away. Non-sub dropdown. Each one a different recipe. Each one with a different flavor of pain for someone in the capital structure.

Octus just published something worth bookmarking: The Stressed Chef, our LME menu breaking down the major liability management structures being used.

We mapped the transactions that defined these tactics, including old staples like J.Crew and At Home and newer creations like Better Health, Xerox and Optimum Communications. For each one, you get the base mechanic, the type of subordination being deployed and a spice rating so you can calibrate how aggressive the playbook really is.

The menu also includes a build-your-own framework so you can map any new transaction against its component parts: type of non-pro-rata purchase, subordination method and available extras like vote rigging, transfer restrictions and multi-step mechanics.

If tracking LME risk or advising clients on stressed credits is on your mind, grab a break with your favorite Chipotle bowl and our menu. 

Welcome back. Obviously, the advancements in Claude in mid-December 2025 really put the “AI is a bubble” thesis to bed, drawing into question software terminal values and rocketing the valuations of Anthropic and OpenAI.

The genie is out of the bottle with AI - it’s here whether you like it or not, so we need to talk about how finance professionals should be planning their careers around it.

Given how rapidly things are changing, we need to take a look at and examine the typical career paths and talk about what happens now. We’ll cover the following:

Let’s talk about these routes:

My overarching belief is that many finance institutions will simply need fewer headcount, as opposed to needing “zero” headcount. It’s important to remember that we’re shifting away from a process designed for Analysts/Associates and humans to find/extract data and more about creating an environment that amenable for agents. Are data and resources set up a way so an agent can go out and autonomously do xyz? The setup in the future is about enabling agents to get after it from a problem solving and end product creation standpoint.

For the Buyside, the overarching theme I’m going to talk about in this newsletter is how being someone who makes investment decisions or raises capital is a way to insulate yourself from AI. “Sales” is a job many of us do every day without knowing, and that’s something that continues to have material value. Ultimately, for Buyside roles and Banking classes, I think the class sizes are going to be smaller, but they will not go away entirely. So there will be the same amount of people competing for fewer seats. Banks and Managers are both consolidating too. Many of people have told me a lot of their class sizes are unchanged, so it’s not something we’re seeing in full force quite yet. I would expect a continued lag given many of these entry level roles are planned 18-24 months in advance.