How are royalty financing deals done?
Have seen some banks do interesting structured finance for royalty financing (for example: music, biotech).
Can any structured finance people in the banking industry explain this please?
Trending Content - Investment Banking Forum
| +439 | Don’t work at UBS - UBS Sucks | 40 | 10h |
| +327 | Article - UBS’ Investment Bank Keeps Losing Ground | 41 | 4d |
| +186 | Should My Intern Get a Return Offer? | 53 | 12h |
| +64 | When to Leave Office as Intern | 8 | 6d |
| +56 | F*ck it I'm Going to Med School | 19 | 1d |
| +40 | Living in greenwich as an analyst? | 8 | 9h |
| +39 | Would you rather be a Touse Squid or a Bouse Mogger in IB | 2 | 5d |
| +39 | Getting Laid in IB? | 20 | 4h |
| +32 | STEM student lost in London IB recruiting | 18 | 15h |
| +27 | NYC Associate Budget | 9 | 7h |
Career Resources
Product has a set of projected cash flows.
Throw on some structure (upfront, royalties, etc).
Figure out NPV. That’s the offer.
Probably coverage team. Maybe PE team if they do private placement work.
Depends on the role i.e. whether bank is structuring agent, joint lead, co-manager, bookrunner, etc. Client usually provides projected cash flow data (sometimes internal, but with esoteric products typically you'll have a ops consultant FTI, A&M, etc. that maps out market estimates for royalties). ABS team usually has a technically oriented structurer who can do anything from simple projections to proprietary stochastic models, monte carlo simulations, etc. The models are morseo meant for calculating risk at tranche level based on defaults rather than trying to predict the cash flows. Anyways once that's done, rest of team packages it in nice pitchbooks and go through regular marketing/syndication process as you would in DCM, levfin, etc. Hope that helps.
Quis nesciunt et dolores rerum quasi in vero. Facere dignissimos molestiae repudiandae eum. Qui possimus voluptatum est consequuntur quis fuga. Et esse error labore earum. Officiis sit sint pariatur illum molestiae.
Rerum repudiandae exercitationem laudantium a omnis optio eos. Sunt assumenda dolorem optio iusto ex quaerat. Aut voluptas vero consequatur error necessitatibus enim quidem dicta. Aut quos sapiente nesciunt corrupti repudiandae ratione.
Reiciendis iusto nihil sed rem numquam vel. Aspernatur rem vitae laboriosam eaque.
Repellendus est sint quam tempore et. Hic maiores sed consequatur. Perspiciatis earum id in ut facere consectetur qui. Dolor aut voluptas maxime dolorem odio minus aliquam. In fuga fuga architecto quidem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...