Leveraged Finance (also known as LevFin) is an area within the investment banking division of a bank that is responsible for providing advice and loans to private equity firms and corporations for leveraged buyouts.

Bankers working in Leveraged Finance tend to focus more on high-yield and mezzanine debt as they can typically charge higher fees and the client is more willing to do so due to lack of debt covenants.

Leveraged Finance departments work on acquisitions (leveraged buyouts), recapitalisations and asset purchases. Companies looking to do any of those things can do so using debt and it is cheaper to use debt than to use equity or cash.

Although Leveraged Finance and Debt Capital Markets teams both work in debt, the DCM team works more with investors and the markets whilst the LevFin team works with the actual company on the structuring of the deal.

One of the most prestigious LevFin departments is within J.P.Morgan in Europe. Leverage is sometimes referred to as 'gearing' in European countries.

Related Terms

• Bridge Loan
• Debt
• Debt Capital Markets (DCM)
• Investment Banking Division (IBD)
• Leveraged Buyout (LBO)
• Leverage
• Private Equity (PE)
• Restructuring

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