What are the similarities between Leveraged Finance and Restructuring? I've noticed that many RX groups are housed under the LevFin group at BBs - with this I'm inferring that both divisions share similar skillsets? However I just can't see how understanding of HY Debt has anything to do with RX. Can someone expand on this?
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I think the RX under lev fin at BBs is strictly lending to companies reorganizing in bankruptcy / in distressed situations, not advisory like at places like BX, Lazard, Millstein, etc.
The above is generally correct, although not always true. BB's often can't provide RX advice due to conflicts of interest (often they are the ones who were involved in the creation of the loan itself).
@goblan that thing with that is, i don't understand why it would be classified under LevFin instead of DCM. DIP financing has a super priority lien and is always over-collateralized plus must be paid off when the company comes out of bankruptcy; shouldn't it be classified under DCM? PS, not trying to argue, just genuinely curious.
The skill sets just aren't comparable.
It would go like this: Banker: "hey DCM, you busy?" DCM: "yea, got this tap issue for AT&T, got to run market comps, start looking at the Treasury curve and start book building" B: "okay, well you know Bumblefuck Paper & Packing?" DCM: "hahah, yea, that piece of shit, what of it?" B: "could you raise some DIP financing for it?" DCM: "some DIT financing?" B: ".....never mind"
The structure of DCM deals, the documentation, the companies, the clients (DCM just wouldn't have relationships with the right people) are all different, the mindset just wouldn't be useful.
Lev Fin would have been following the company for a while, seeing if they could raise some money for it, the company probably came to Lev Fin's conference, spoken to their clients to see if they would be interested etc...getting them up the curve would take minutes, not days like DCM.
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