I am currently reading about swap pricing based on using the LIBOR curve to calculate spot rates, forward rates, and discount rates. From what I understand LIBOR is quoted as a simple interest rate based on the date time convention. Thus should these rates first be converted to compounded rates before continuing with bootstrapping?
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It all depends on how you want to represent your yield curve internally. If you choose to use compounded rates as internal yield curve then yes you would need to convert.
All you care about in curve bootstrap is that you want to reprice exactly the instruments you use as input (usually being Libor deposit rates, forward rates, futures, swaps, OIS, basis swaps etc) . Notice that you will usually need to use more than 2 internal curves (one for discounting cashflows based on OIS and one for projecting for each tenor).
