How different is LevFin and DCM/ECM Capital Market?
Noob question guys and gal. What is the difference between LevFin and DCM/ECM in Capital Market? What about in terms of day-to-day responsibilities? I'm exploring opportunities in ECM/DCM, and I'm wondering whether it has good exit opportunties. Thank a lot in advance all.
Leveraged Finance vs DCM
Debt capital market teams provide advice on raising debt for acquisitions, refinancing of existing debt or restructuring existing debt. They work more closely with trading desks and deal in investment grade debt.
from certified user @metalalpha"
LevFin = High Yield
DCM = Investment Grade
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Honestly, search function. I've seen this answered so many times in the past couple of weeks it's not funny.
Regardless, LevFin is less plain vanilla than ECM/DCM and far more integrated into things like the LBO process. What LevFin group is good depends on whether analysts do modeling or whether they do pricing. Some LevFin groups are heavy on Sponsor exposure (LBOs and Dividend Recaps) while others are more focused on corporates (refinancings and new issuances). You can guess which have better exit opps.
Please don't bother asking follow-up questions now. Search function.
Thanks a lot
(p.s. I never said it was funny in any way.)
Difference, investment and non-investment grade. day-to-day responsibilities vary with each bank, but lev fin usually have good exit opps into hf's n pe, if you are exposed to good amount of deal flow
LevFin = High Yield
DCM = Investment Grade
LevFin vs DCM (Originally Posted: 11/08/2009)
Is there a difference, or is one part of the other? I've heard LevFin is part of DCM, but also that LevFin has great exits to PE while capital markets doesn't so I'm slightly confused. Any thoughts would be really helpful. Thanks!
Lev fin focuses on high yield and you get the type of credit analysis which PE firms prefer + good LevFin guys can move to credit hedge funds
DCM (typically though varies from bank to bank) focuses on investment grade and, in my expeirence, credit analysis is somewhat lighter.
DCM doesnt involve any thought, LevFin does. Simple. Given the risks involved with high yield bonds and leveraged loans, the amount of analysis that goes into any LevFin transaction is infinitely more in-depth than in DCM.
so to clarify - DCM and LevFin both focus on debt financing
also - so an LBO would need help from both the M&A group and the LevFin group? and PE firms like M&A guys since PE firms buy companies and LevFin guys since PE firms need to arrange high yield debt to finance LBOs?
M&A will still place better into PE than Lev Fin, because Lev Fin doesn't really focus on valuation.
LevFin and DCM (Originally Posted: 09/07/2010)
Hi, I would like to find out whether DCM and Leverage Finance are the same? Do they fall under Capital Markets or Investment Banking? Thank you
i think they are similar but lev fin would only look at high yield and often would be targeted at hedge funds.
in terms of what they fall under i think it depends from bank to bank i think, but generally you will have to do corporate finance work i.e. modelling, packs etc
DCM is very process driven -- e.g. Microsoft (AA or A rated) needs to issue some bonds. Institutional investors (e.g. PIMCO's, Fidelity's) line up to buy it, not really that much "risk" or unknowns.
LevFin is a different animal. High yield bonds are issued by non-investment grade companies (i.e. significant credit risk). As such much more due-diligence is required. This is compounded when it comes to Leveraged Buyouts (run by LevFin and Financial Sponsors) when private equity funds needs to borrow large sums (bank loans, hy bonds, mezz funds) to finance the transaction. In this case, each creditor assumes a significant amount of risk -- therefore, significantly more due-diligence, strategic considerations, and financial modelling is required.
Ah yes, another DCM Lev Fin thread.
lev fin is leveraged loans (although kinda dead right now), high yield bonds, and mezz debt.
dcm... is well... investment grade, plain vanilla stuff. some banks put levfin in the dcm bucket.
There's $26 billion+ of leveraged loans in the forward calendar.
hello
I think they are same to find more info you can Google it .
Thanks http://www.fintel.us/
LevFin has been getting destroyed (in terms of monstrous deal flow) since July
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