DCM Case Study advice
Hey, So I've been sent a case study to send back before my interview in Debt Capital Markets with a MM firm. I'm probably overthinking this as it's probably my last chance to get a Summer Internship in a FO position. The case study asks you for recommendation with issuing a bond for a country looking to borrow $5bn in 2020 to finance a project that will take 12 years. The country's credit rating is A+ and it wants 23% of the funding complete by Q1 in 2020. In the report the following should be included -capital markets backdrop -timing of a transaction -currencies -maturities -types of investors that will buy the proposed bond issue(s) -indication of the interest rate that Ruritania will have to pay for borrowing from capital markets - fees charged by the underwriting bank.
I've a basic knowledge of the capital markets at the moment and would appreciate any in sight from anyone who has more knowledge. Also I'm completely lost in the fees that the bank would charge for this. I'd really appreciate any pointers though!
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so basically they are asking you to put together a pitch, which is 90% of what you will do in your future job. - use ppt format, 1 slide on the backdrop - talk about market, macro events, rates, potential fed actions, etc. tailoring to macro events that would include A+ countries - timing: they are asking you for a timeline for a typical bond issuance, google this, find some timeline on google and recreate it - currencies: USD, EUR, - Maturities: 5,7,12 three tranches - investors: pension fund,etc -not sure if i understand the bullet point -fees on best effort basis？
hey thanks for that, just wondering what way you think would be best to structure the maturities of the bonds would 2-3 frn benchmarked against the us treasury be best for the 20% of the 5bn and then 10 and 30 years is treasury +250bps-ish for the rest work?
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