DCM - On The Job Insights
I am hoping some experienced folk on this forum could provide me with some deep insights into the DCM world.
I have recently just read the Pearl & Rosenbaum book on valuation, it's very insightful but I feel it is heavily geared towards the Equity related business of banks (IPO's, M&A ect..), I'm looking to develop a deeper understanding of the DCM side. Firstly, I was wondering, do DCM groups build/use the same models used in ECM/IB groups ? I have compared a few equity research reports to credit reports & I can see the ratios looked at are slightly different – and obviously emphasis is placed on the price of their bonds/CDs as opposed to price of their stocks.
The main thing I am trying to understand is what exactly does a DCM banker do- and what goes into their pitchbooks ? There's not nearly as much info on the day-to-day role as you might find in IB/ECM groups, for one – I'd like to understand exactly, how would you determine what type of debt / structure would be suitable for a given client ? Do you run different debt scenarios on the company and work out which would be the most suitable (or least expensive) ? Do you look at the impact debt has on their valuations ? Do you try and figure out the likely ratings of a bond issuance ? How comparable company bonds are performing in the secondary markets ect… Any high level insights / reading would be much appreciated.