Structured Finance - what is it?
I really have no idea about this division. Is it similar to corporate banking at places like Citi? I'm referring specifically to BNP Paribas.
I really have no idea about this division. Is it similar to corporate banking at places like Citi? I'm referring specifically to BNP Paribas.
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It's structuring asset backed securities and stuff. Basically it's like a more technical DCM or Lev Fin but you work with secured debt instead of debentures. It's an interesting space but I don't know if BNP Paribas is any good at it.
This is pretty much it. It's more quantitative than most roles in banking, especially if you're working on a structured products desk creating "exotic" products.
That said, structured finance is pretty broad, it's more of a methodology rather than a product so you could work in equities, fixed income, currencies, or real estate.
BNP Paribas (at least in Europe) is 1st or 2nd in structured products. The French are highly quantitative and know their stuff. The US is a different story. The market for complex products has died and their structuring group also dabbles in corporate solutions, similar to Citi's Financial Solutions Group.
Good description below:
http://www.coolavenues.com/forums/showthread.php?t=8514
Yeah idk, in the US BNP Paribas isn't even on the radar as far as structured products are concerned.
And while the French may have good quantitative skills, they fail miserably at basic due dilligence and risk management so I would personally never trust them to do a securitization for me.
Meh, so not a good place for someone who's not into the really technical stuff?
I don't think banking is a good place for someone who's not into technical stuff. These days, you're never going to be a grade A player if you can't work with the more esoteric concepts.
Yeah, the guys on the desk have gone through highly rigorous mathematics training. ODE, Calculus, Linear Algebra are fairly basic for the guys on the desk, and they even remember it. They're definitely not your average banker who studied economics and struggled in regression analysis.
This is not true. Nothing personal, you just happen to be wrong and I don't want to give this kid bad information.
At BNPP Structured Finance operates similarly to a coverage group in a bank, but it does it's own financing (i.e. Project Financing, secured and unsecured loans, revolvers, etc.) It is actually very highly regarded worldwide and in the U.S, the top groups are top 5 ranked worldwide and in U.S., especially in Aviation, O&G, Offshore, Shipping, etc, basically very capital intensive businesses where having a huge balance sheet helps.
The structured products people were mentioning earlier like convertibles, securitizations, etc is done by different groups. So i.e. if structured finance aviation has a client, they'll have DCM come in and pitch a HY bond or the interest rate desk come in and pitch a swap, etc.
I wouldn't say its ridiculously quantitative, as the derivatives guys do their own thing which is separate and part of capital markets in BNPP. The exotic products is part of different division its not structured finance, the SF does the things I described above, and revolvers/project finance deals aren't so quant.
NYCC Abander your an idiot because the reason why BNPP did so well throughout the crisis is due to their risk management and due diligence. Unfortunately at BNPP the level of risk management is so absurd that great deals get rejected because of risk, when they very well should be approved.
Depending on how accurate this is it may be good color on BNP Paribas' specific group but this is not normal for Wall Street structured finance groups. In general they're certainly a "special" product group but at the end of the day they're a product group.
I just want to know though, if BNP Paribas' structured finance group doesn't do structured finance, what the hell do they do? Why doesn't the industrial group cover aviation like every other bank? What kind of structured finance group underwrites debentures? Or traditional revolvers (obviously conduits and other structured revolvers aside)? This sort of reeks of someone that doesn't know what the fuck they are talking about.
Also I think you're an idiot because you failed at a simple copy + paste of my name. Your senior bankers must hate you.
The above on BNPP is very accurate. At the US investment banks, structured finance will refer to the desks that cover asset backed securities and derivatives. Outside the US (where there is a limited ABS market) and generally at most of the European hybrid banks, structured finance will cover non-vanilla lending groups. Depending on the bank this will cover project finance, asset/equipment lending/leasing, commodity finance, structured trade, and sometimes acq fin.
At BNPP specifically, structured finance (as defined above) is a huge part of the bank (far larger than their ABS desks) and due to its traditional strength of this broad product group, it often ends up taking on a hybrid coverage role especially in core sectors such as commodity/energy.
Because there is no industrial group at BNP, and I have no idea why it is the way it is. Considering I used to work in SF at BNP, I'm pretty sure I know what the fuck I am talking about. Like I said, think of it as a typical coverage group within a bank, but one that focuses on corporate lending/financing, and then if there's anything specific that the client needs (i.e. convertibles, an IPO, etc), those teams will pitch to the client but the SF team is the one that maintains access to the client.
Smith is right on the money, and BNPP is very good in structured finance.
According to the league table I'm looking at (WSJ's) they're not in the top 10 globally, and are 6th in Europe. That's not exactly killing it. Anyway, I'm not trying to say they're bad, I've just never seen them do a structured finance deal. It sounds like they don't actually really do structured finance so who knows how much revenue they account for.
Because you are looking at a different type of structured finance, not the one we are talking about. Nearly every major shipping, offshore o&g, aviation, wind energy company has a major secured/unsecured loan or revolver from BNPP. Search for things like Bookrunner or Lead Agent on Aviation deals or shipping deals and then you'll see.
Wow so much non sense here!
At French banks, Structured Finance falls into IBD (and not capital markets). They are many structured finance groups and acquisition or leveraged finance fall into this division. Basically, you have generalist groups such as the leveraged finance and industry group such as media & telecom finance or real estate finance that do any types of financing (lev fin, acq fin, project finance, export finance, debt restructuring etc). The French banks are definitely top banks in Structured Finance, not only BNPP but also Credit Agricole and SocGen.
http://www.graduates.bnpparibas.com/structured-finance.html
To give you guys an idea of the missions you could have in such a group as an intern or an analyst, here is an offer for the media & telecom group at BNPP
The intern will be fully included in the Media & Telecom Finance team, specialised in financing companies in the Media and Telecom sector in Europe Middle East and Africa (Acquisition Finance, Leverage Finance and Project Finance).
The intern will be responsible for: - Assisting the team in analysing credit risk and structuring financing proposals (industry/ sector/ country analysis, financial analysis of the borrower, benchmarking, modelling of financial projections, assessment of the funding requirements, structuring the credit facility); - Cash-flow modelling (Excel); - Updating financial databases used to evaluate the clients versus their competitors/ prospects; - Performing sector analysis and additional duties of general interest for the team as required. The objective of interns will be to integrate in the team and learn to efficiently assist team members on various tasks (credit papers, financial modelling, client presentation, databases).
For Structured Finance:
Damn dude, sorry. I take back everything I said.
All joking aside though, none of that shit is "structured finance" as it is normally defined anyways. BNPP seems to have a different definition of structured finance. That's OK, but don't go around saying you're #1 in structured finance when that's not even close to the case. You're not even in the running.
Here's a link to the wikipedia page which should clear it up for you.
http://en.wikipedia.org/wiki/Structured_finance
11 years late to the conversation. But god damn this is hilarious
You may be right the OP specifically asked about BNPP and your answer was off in this case. Now once again the French seem to define it this way as you can see it on Crédit Agricole's website (in English fyi)
http://www.ca-cib.com/business-lines/structured-finance.htm
The Structured Finance business consists in originating, structuring, and financing operations involving large-scale exports and investments in France and abroad, often backed by collateral security (e.g. aircraft, ships, corporate real estate, or commodities), as well as complex and structured loans.
The Structured Finance division comprises nine finance segments: aviation and rail / shipping finance / tax-based leases / natural resources, infrastructure and power / real estate and lodging / export and trade finance / acquisition finance / transactional commodity finance / structured finance advisory.
In each of these activities, Crédit Agricole CIB ranks among the world's top players.
Yeah, I'm not saying you're wrong about BNPP, I had no idea about BNPP's business (learned a lot though!) but I know what structured finance is. Sounds like it's defined pretty differently in France, and that's the source of confusion.
Credit Agricole is an enormous joke in the US structured finance world. They have the world's most poorly run ABCP conduit lending facilities. They're first in that I suppose.
Neither of you are #1 in structured finance as it's defined by the rest of the world though, so stop claiming it.
Anyway, they are not claiming to be the best in "structured finance", they claim to be among the best in each specific type of financing and in league tables you don't have a ranking for structured finance but ones for leveraged finance, acquisition finance etc and then it does not matter how these banks are organized as long as they provide the services theirs clients want and seem to be good at doing it.
structured divisions usually have better math skills than M&A team
interesting reading: Structured finance, the recovery continues http://www.ca-cib.com/sitegenic/medias/DOC/15951/2011-03-07-option-fina…
"Worldwide, project finance volume totaled nearly $230 billion last year [2010], compared with only $150 billion in 2009 and around $260 billion in 2008."
Along with the offer in the media & telecom finance group at BNPP, here is how SocGen defines it:
Media & Telecom Finance
The Media & Telecom Finance department is responsible for originating, structuring and executing all lending in the sector, including:
Leveraged Buy-outs (LBO) Strategic Acquisition Finance (both Investment Grade and Non-Investment Grade) Corporate Leveraged Loans Project Finance The Department is also responsible for designing the most appropriate capital structures for clients, with access to advisory services, including:
Optimisation between intermediated/disintermediated sources of funding (all asset classes from equity to bank debt) Interest and Forex rate risk management Debt restructuring The Media & Telecom Finance department comprises an integrated network of specialist teams in London, Paris, New York and Hong Kong that are also capable of calling on the local expertise of Société Générale Corporate & Investment Banking\'\'s regional bankers whenever necessary to best serve our clients.
The Department has a breadth of experience across Media & Telecom sub-sectors complemented by seamless access to other SG CIB teams including specialist teams dealing with Debt & Equity Capital Markets, M&A and Coverage for Media & Telecom. This complementary approach allows us to access a wide range of debt and equity products including high yield, hedging, M&A, equity linked and equity derivatives.
Well, NYC, you gotta get your head out of that hole and focus, the question was about structured finance in BNP paribas, you got it wrong. If it means something else in the US, thats other question, and because you dont know the french banks it doesnt mean they are not strong in their own way, just look for example SG's equity derivatives BNPP's commodity finance or Oil and Gas / Metals and mining financing of both banks and tell me about third tier. The fact they are not the biggest players in the US is easily explained when you take into account cost of funding in dollar, but on a global scale are still finance powerhouses in their areas.
No, I totally agree. I was completely wrong about BNPP's business. But you see where I'm coming from right? That's not really structured finance as most would define it, and it's disingenuous to run around saying you're #1 in structured finance when your definition doesn't match anyone else's. People have spent careers building these businesses and it's not fair for these assholes to come in with their random definition of structured finance, which literally includes industrials coverage, and say they are #1.
And it's bullshit to credit these banks for the random areas they do well in. All banks have a space they win in, that's just how it is. The first tier banks do well in many spaces, not just "commodity finance" which is frankly pretty fucking esoteric. I mean, L'andro's Pawn + Loan might run the West Philly payday lending space, but that doesn't make it a strong global banking franchise.
Also, I'll give respect to the French banks when I lose a mandate to them. Still waiting.
Obviously no point to continue this. I just hope the irony isn't lost when you're calling commodity finance "fucking esoteric" and talk about people spending careers building their securitization business only "for these assholes to come in with their random definitions".
So to direct the thread in another direction, I'd be intersted to get some color on who are the big players in Structured Finance, specifically in structured equity and structure credit products. I don't think this is more the type of stuff NYCbandar was talking about and I'd be very interested to learn more.
My impression is that JP Morgan. Morgan Stanley and DB are the major players in these areas in the US. I'd love to be corrected though.
So, based on this thread, it seems as though Structured Finance is the equivalent of Corporate Banking at Wells Fargo and JPM.
Can anyone confirm or deny?
Alternatively, does structured finance/corporate banking go by any other names at other banks?
It's similar (the financing part) but most of the groups in BNP SF have a coverage role as well. So project finance, different asset finance types (aviation, o&g, etc) will also have all the functions that a typical IB coverage group will, including advisory. The SF team will also cover the client with other product groups throughout the bank, so if the client needs an IRS, or wants to IPO or do a high-yield, etc, the SF team will be in a coverage role.
Are we talking about the same exact thing?
Does SF @ BNP pay well in the UK? Would the nature of the work described in this thread provide opportunities to move to DCM/M&A in the future?
There is a lot of movement between project finance and DCM/syndications/acq&levfin as it is a very credit/structuring intensive product. I know BNPP guys who moved to HY/DCM; on the banking side it's easier to move into industry specific coverage/M&A groups (i.e. staying within the same industry vertical such as energy/nat res or power/utilities).
I would be careful not to generalize too much (aircraft is very different from mining etc!) but at least on the energy/commodity side at BNPP the best exits were probably into commodity traders/energy funds (certainly more highly regarded than lateraling into a capital markets group).
Thank you kingb.
Thought BNPP's strength was Equity Derivatives.
A bank can have more than 1 strength you know, this isn't power rangers where every character has 1 special power.
structured finance intro/tutorial online? (Originally Posted: 02/11/2007)
I'm looking for a good resource to read and learn the basics of structured finance and collaterized debt obligations. the problem is that I'm looking for free resources (websites, blogs, forums, pdfs, academic files, etc...) any help would be extremely appreciated.
Your best bet would be the library. There is plenty of into books out there on sf basics (basically anything by fabozzi such as intro to structured finance or handbook of MBS is good). Another good source which is a bit more advanced is www.moodys.com Register for free and navigate to the Structured finance-> rating methodology tab
ssrn.com has some info you can look at. your local library should also have fabozzi's book on CDO's. The second edition (purple cover) is the newest one out there. the bond market association (bondmarkets.com) also has a great site with research articles and current sentiments on securitization. they also have great links for you to look at as well. securitization.net is also a fair resource.
Structured Finance Groups (Originally Posted: 07/27/2015)
Could anyone tell me a little bit more about these groups? Some banks advertise them as a mix between cap markets and traditional IBD, so I would love to hear about the work that they do and the skills that are important.
Thanks!
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bump
Structured Finance inquiry (Originally Posted: 03/08/2016)
Can someone tell me more about structured finance and if it is an attractive sector to go into?
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Structured Finance will lead to what? (Originally Posted: 05/19/2011)
Hi there,
I received a summer internship offer doing structured finance. After doing some research, I couldn't find out what the exit opportunities are. Can someone shed some lights on this? I'm wondering whether this will lead to levereged finance in the future.
I've met someone who was in Structured Finance in a middle-tier BB and now works at a PE megafund
By middle-tier BB do you mean one of the big french banks (BNP/SocGen?)
I'm not a bank snob but those aren't middle tier BB; it's probably BARC/DB/UBS or one of those.
by mid-tier BB i mean BARC/BAML/CS
BNP/Socgen>>>>UBS, and especially if we are talking about structured finance barc/Baml don't even do structured finance
It's just an internship. Take it and find out what it's like.
BAML did structured finance wtf are you talking about
Structured Finance doesn't refer to one activity, in fact there are many structured finance teams. If we talk about SocGen/BNP, within Structured Finance, you can find Strategic & Acquisition finance (Basically Non Leveraged Acquisition Finance), Leveraged Finance, Aircraft & Ship Finance, Industry Focused Structured Finance teams (think Media & Telecom Finance, Real Estate Finance etc), Export Finance, etc etc etc etc
The daily work in Export Finance is close to commercial banking whereas the job in leveraged / acquisition finance is in fact pretty close to M&A. In an Industry Focused Structured finance, you will learn as much as in a coverage group since you ll work only on one industry and you will know pretty much everything about modelling, specific valuation + the whole range of financing products.
++ Hours are slightly better - - Bonus are lower than those in m&a but base is the same
It can be a good exit op for an m&a guy who wants to stay in banking but who aspire to a better life style
Within Stuctured Finance the really high profile business lines are LevFin and Project Finance. That's really where the deals are the most sophiticated, and this is indeed considered as IB rather that Commercial Banking.
As mentioned previously, bonuses are slightly lower than in M&A but still respectable and hours are waaaay better (especially in Project Finance where it's not uncommon to see deals being executed in no less than 6 months; the work load is spread all along).
Banks like the one you mention are clear leaders. I know some guys in Project at BNPP; these guys are pretty high profile bankers, that would easily compare to good BB invesment bankers in terms of technical skills.
thats interesting.. what do you guys think about the exit ops for doing structured finance in an accounting firm?
like PwC FIG? interested as well
Accounting firms structured finance will be on a pure advisory level, since they don't have balance sheets. Advising in financing projects isn't nearly as lucrative and won't pay nearly the fees as actually providing the financing, so the modelling and rest of the work will be inferior in an accounting firm to a BNP/SocGen
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