What is leveraged finance IB?
Leveraged Finance (also known as LevFin or LF) is an area within the Investment Banking Division (IBD) of a bank that is responsible for providing advice and loans to private equity firms as well as corporations for primarily: Leveraged buyouts, Recapitalizations, Refinancing old debt, and. Mergers & acquisitions.
What is the difference between LevFin and DCM?
The key difference is that DCM focuses on investment-grade debt issuances that are used for everyday purposes, while LevFin focuses on below-investment-grade issuances (“high-yield bonds” or “leveraged loans”) that are often used to fund control acquisitions, leveraged buyouts, and other transactions.
What is IB restructuring?
Restructuring Investment Banking Definition: In Restructuring IB, bankers advise companies (debtors) on deals to modify their capital structures so that they can survive; they also work on bankruptcies, liquidations, and distressed sales, and they may advise the creditors, rather than the debtor, on each deal.
Is DCM investment banking?
Debt Capital Markets (DCM) is part of the Global Corporate and Investment Banking Division (GCIB) at Bank of America (BofA). DCM professionals originate, structure, risk manage and execute debt products, including bonds (across public and private markets), loans and acquisition finance.
What should I do after DCM?
People often shift from DCM into other desks within fixed income – sales, syndication, research or (less likely) trading. Given the product-specific nature of DCM, moving to M&A or ECM is less common, although not impossible at a junior level.
Is leveraged finance part of DCM?
What is Leveraged Finance? Leveraged finance (“LevFin”) is in its official capacity a debt capital markets (DCM) group. However, when investment bankers refer to DCM they are almost always referring to investment grade debt capital markets. Levfin is in practice treated as a separate product group.
What is financial restructuring?
Financial restructuring is a specialist initiative undertaken to reorganize the financial assets and liabilities of a business enterprise in order to make the most beneficial environment for that entity. Primarily, it comprises of reorganising share capital and debt.
What does a restructuring advisor do?
A restructuring advisor assists the company in developing a turnaround plan and negotiating with its creditors. These plans are complex and require a thorough knowledge of bankruptcy laws, lending practices, creditor rights, valuations, etc., all of which a seasoned restructuring advisor can provide.
What is TLB financing?
Also referred to as a Term B Loan or an institutional term loan. A term loan made by institutional investors whose primary goals are maximizing the long-term total returns on their investments.
Can you move from DCM to M&A?
And that’s when you decide to make the move into M&A – or even a solid industry group that does a lot of M&A deals. A number of coaching clients have moved from ECM or DCM into M&A recently, so this article is mostly based on what they encountered in the process.
What is DCM origination?
The term used to describe the role of those investment bankers that work directly with issuer clients to bring new bond issues to market is ‘originator’. Hence, someone working in this field might be known variously as: a debt capital markets originator (or DCM originator);
Is DCM better than ECM?
DCM issuance is far higher than ECM. Every year, the amount of debt issued globally is typically four or five times higher than the amount of equity issued. In practical terms, this means that the role of ECM and DCM bankers is quite different. “In DCM, there’s a lot more repeat business,” says Rambosson.
What are the types of financial restructuring?
The two components of financial restructuring are;
- Debt Restructuring.
- Equity Restructuring.
What is a restructuring plan?
A Restructuring Plan is a formal arrangement between a company and its creditors and/or its shareholders. It may be used by companies facing financial difficulties that are capable of being rescued as a going concern (there is no need to wait for imminent insolvency).
What is leveraged finance origination&restructuring?
At some banks, LevFin is more of a markets-based role, and some firms label it “Leveraged Debt Capital Markets” or “Leveraged Finance Origination & Restructuring” or other, slightly different names. At other firms, Leveraged Finance might be classified under investment banking and work more closely with the M&A team.
What is leveraged finance (levfin)?
Within the investment bank, the Leveraged Finance (“LevFin”) group works with corporations and private equity firms to raise debt capital by syndicating loans and underwriting bond offerings to be used in LBOs, M&A, debt refinancing and recapitalizations. The funds raised are used primarily for:
What are some examples of leveraged finance divisions?
For example, if a private equity firm is exploring various financing options in its efforts to acquire another company, the leveraged finance division would present different types of debt the client firm might raise (bank debt, high-yield debt, syndicated loans, etc.).
Why is it important to understand leverage?
Understanding leverage can also help in forecasting cash flows, allowing the selection of an appropriate discount rate for finding a firm’s present value. Here is a simple example of exactly how leveraged finance increases equity returns.