Acquisition Financing – Investment Grade Bonds, Private Placements, Term Loan B, High Yield Debt Bonds, notes and term loans for institutional investors are otherwise seen as much more permanent capital than bank debt and is not meant to be paid down opportunistically. Fixed income investors – which are a distinct group
Debt Capital Markets
Working in Treasury
Related: Interview with a Treasury Analyst What is Corporate Treasury? Treasury is the cash management function of the bank – it is responsible for cash inflows and cash outflows. Ideally, the treasury maximizes the cash inflows while minimizing the cash outflows via a variety of risk management solutions and opportune financing. Treasury
Debt Capital Markets Analyst and Associate Work
Interview with: Credit Rating Agency Analyst
Debt Capital Markets
What is Debt Capital Markets (DCM)? Back to Investment Banking Debt Capital Markets (DCM) is a financing group in Investment Banking which helps to connect debt issuers and debt investors depending on their respective needs pertaining to tenor/maturity, currency (issue in USD, CAD, GDP, CNY, JPY, EUR), coupon (fixed/floating), security/collateral, and other
Investment Banking Credit Ratings Advisory
Credit Ratings for Blue-Chip Corporates Companies care about their credit ratings and may have certain targets. For instance, many companies have historically aimed to maintain an investment grade rating from at least one credit agency (BBB- for Standard and Poors or Baa3 for Moody’s). Blue-chip stocks that see widespread investor interest are
Differences Between Leveraged Finance and 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. Functionally, the two roles end up
Early Bond Redemption Analysis
Early Retirement of Debt for Capital Structure Debt Capital Markets may approach companies to discuss opportunistically retiring outstanding debt before the natural maturity date. As bonds are contractual obligations for a set period of time, the early paydown of debt must be negotiated unless there is a provision that allows for
Hedging Interest Rate Risk
Risk From Rising Interest Rates When organizations issue debt, they face interest rate risk – that is risk from fluctuations in benchmark interest rates (the government or bank interest rate that their loan interest is based on) may cause cash flow obligations to increase. Simply, if interest rates rise, future interest