DCM - Lev Fin - Syndicate - Outside Investors
Hi guys, could someone please explain the following. I read online that "DCM focuses on investment-grade bonds that are syndicated and sold to outside investors". I get that Lev Fin is focused on high yield bonds.
What does it mean by bonds are syndicated and sold to 'outside investors'. Are bonds sold by Lev Fin also syndicated and can be sold to 'outside investors'
It means exactly that - someone has to invest / hold the bonds, so the syndication team "sells" the bonds and ensures they are allocated amongst investors. There can be private placements, etc., but most securities are syndicated on this basis if thats what you're referring to. Similarly to the IPO process, you may have "roadshows" in which presentations are made and meetings are held with institutional investors (blackrock, etc.) to garner attention and gauge interest.
Thanks! High yield bonds can also be syndicated as well right, and sold to outside investors (not just the vanilla bonds a DCM team might deal with)?
Thank you.
Exactly - most are Regs / 144A, meaning sold primarily to QIBs.
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