Jefferies was the only US bank which was part of the mandate to issue $2.5bn for Adani. According to FT the margins on the mandate were wafer thin at "just a few hundred thousand per bank".
When Hindenberg released its report, which is highly worth a read, rather than pausing to fulfill its due diligence Jefferies decided with the other Indian banks to proceed with the share issuance. It was Adani who pulled the issuance when the stock traded 25% below the issuance price.
What the fuck kind of diligence does Jefferies do? If you read the report there are some blatantly obvious issues like:
1: not having a real credible auditing firm
2: private holdings of adani in excess of public float requirements in India
3. Moving losses into offshore entities to remove them from the books
4. And just egregious valuation and leverage
I get Investment bankers aren't the most scrutinizing on due diligence, but damn Jefferies, do your fucking job.
Comments (20)
Classic Jefferies - they'll finance anything with a pulse. The bread and butter of their franchise.
lol, the classic 'we only do diligence on the buyside, but on the sellside, we automatically know this stuff is good cause our clients said so'
Why would a bank only do due diligence on the buyside clients and not the sellside clients? Uninformed intern here.
He is saying buyside (investors) perform diligence and sell side (jefferies in this case) generally don't do diligence as it's not their loss if something goes wrong on the investment. Finra requires banks to do diligence, it's just not really enforced. But this is just freaking shameless lack of professionalism to sell something anyone with a brain can know is absolute garbage.
Bro this is the same bank that almost did an equity issuance for Hertz mid bankruptcy during COVID
Lol Jefferies has always been known as the shop that will finance anything. This is on brand.
Did you read the whole report? It's essentially a short book…I couldn't get through all of it.
The bullet points at the front and some of the supporting sections to those bullet points.
Some seemed a bit indirect like the family actions but some are more obvious issues like the accounting firm.
This argument also goes for the following firms, as they all have underwritten securities or acted as a financial advisor for Adani:
Goldman Sachs
Deutsche Bank
Citigroup
EY
Grant Thornton
Morgan Stanley
JP Morgan
BNP Paribas
PWC
Credit Suisse
Macquarie
BAML
You can't really shit on Jefferies when the rest of the street did the exact same thing as some point. Specifically Bank of America which has had 8bn dollars worth of transactions with the company on 8 different transactions. I think you're just looking for an excuse to jump on the bandwagon.
Lack of diligence is a major problem across the street. This is why the 2008 recession happened. This is why we allowed a bunch of companies to lever up during covid and are now defaulting on all of their bond issuances. These practices are street wide, and if you think your firm is better it isn't.
Really good point.
And wow.
Found another Handler burner account
no way any self-respecting person would spend that much time researching to defend Jefferies
Point still stands my friend, also it's like 2 clicks on Capiq lol
That was before circumstances changed, this is now.
Not saying you're wrong, but can you name some of the companies that levered up during covid and are now defaulting on their bonds? Genuinely just curious.
I did some research on BDC's over the last year or so, you should try to look into the holdings of Ares, Owlrock, and GSAM. There are some of the companies that are public and by god their debt is shitty and the companies are even worse. L/S + 6-7% on some first lien debt financings. All of them are post-COVID when the fed funds rate was like 0.5%
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