Can someone provide me with a rough estimate on the restructuring fees:
1) What is a typical fee scheme (in terms of %)for working on debtor vs. creditor side. My assumpsion is more monthly fees and less sucess fees if work for the debtor and the opposite way if work for the creditor
2) Is there a preminum fee for big players like Blackstone, Lazard or Houlihan ?
Thanks a lot
| +128 | If Tik Tok is forced to sell, what banks do you think would be involved in the deal? | 59 | 1d | |
| +49 | Intern Ettiquette | 14 | 3h | |
| +44 | Ranking banks that went under | 34 | 1h | |
| +39 | Burnt Out M&A ASO | 22 | 1d | |
| +38 | Relevance of A-Levels for U.K. London recruiting | 27 | 24s | |
| +26 | What are hours like at BBs in London? | 48 | 10h | |
| +26 | 2024 new grads who didnt get return offers update | 12 | 10h | |
| +19 | 3.7 at semi target, how can I prep for recrutiing | 5 | 4d | |
| +19 | Lateral from BB M&A to MM A&D - Tips for Interviewing for A&D? | 7 | 4d | |
| +19 | PSA to gymcels: focus on the summer internship | 9 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Official:
Ex. $YourDreamDealSize
-a monthly retainer & success fees: 99% goes to your dream MD I work for, .9% goes to your dream associates who are my colleagues, the rest goes to pay for your mom and your dream condos and cars I own. -the premium fee=20%x$YourDreamDealSize for your dream company
I hope this helps.
Lol. That does not not help. I would like to know how much banks charge (think of HLHZ, BX,Lazard...) to be an advisor. Example: Lyondell Chemical.
I know that there is a retainer fee (just like any M&A advsiory) and a sucess fees + fees they charge on working on any capital raisings (DIP...)which I don't care much.
Example of what I found in court documents: case of Young Broadcasting in Feb 2009. HEre is what the debtor has agreed to pay UBS as their financial advisor:
a) Monthly cash of $150K b) Transaction fee of $4MM 2) 5.75% of any capital raising throuh Equity 3) 3% of any capital raisings through Debt
My question is how do banks typically stucture the a) and b) (think of % of something)
I could be wrong on specifics but this is what I remember.
For monthly retainer fees, top restructuring debtor-side restructuring firms can ask for $150K to $250K per month. Success fees are usually a % of the total amount of pre-bankruptcy debt outstanding for a debtor-side advisor. For about $1 billion debt restructuring, you could expect 6 to 8 million but it could be credited against collected monthly retainers. Top debtor-side firms are Lazard, Greenhill and Blackstone. Houlihan will get lucky and get a few debtor-side deals as well as Rothschild.
Creditor-Side, Houlihan owns this area, hands down. The monthly retainer will be lower at about 100K to 150K per month. the success is usually dependent upon the creditor debt amount. You also need to think about the bank-side advisor. Not sure about the amount on this one. Miller Buckfire used to be well known in this area.
Above fees are from the last restructuring boom - 2001 to 2003, so it may be different now. There is more competition.
for $1bn debt restructuring, fees are around 6 to 8m ? So this is more or less the M&A fee (imagine for a transaction around $1bn). Interesting fact. No wonder why banks nowdawys push their M&A bankers to do the restructuring
Another question, let's say Lazard advising the debtor and the debtor raise $1bn in DIP loans. Of course, Lazard does not arrange the loan since they are not in the loan business. Other banks (say Citi or JPM) arrange the loan. How Citi and JPM get the mandate ? from Lazard or from the debtor ? I have heard Citi or JPM would charge 3% to arrange those loans. Does 3% sound low/high to you ?
Thanks a lot
well, Lazard would be the debtors advisor and would shop around and present the BOD with options..
3% up front is often standard (either a sponsor fee, a combination of market & arrangement fees, or a commitment fee)
Oh, court documents. So this is your homework assignment?
Nope this is not a homework. I don't know much about the fee stuff around the restructuring, that's why I ask. I do no pretty well about how much banks charge for M&A and other stuff.
Stop think that only crappy students come here and ask stupid questions.
sometimes there is a premium for the big players when they cant take on anymore deals in a space. im sure at houlihan, if another restaurant company wants to hire them, the HL bankers would jack up the retainer and success fee.
other restructuring shops might try to lowball (but not by much) to compete.
Quis soluta optio harum velit qui a excepturi. Ducimus dolorem asperiores quia nihil. Aliquid non quo perspiciatis asperiores veniam porro.
Inventore libero natus dicta impedit. Commodi magni ut quo dolor. Nobis totam eum est adipisci eaque est. Consequatur eaque sequi ut possimus.
Quod et veritatis dolor. Consequatur et harum nisi autem autem harum ut. Accusamus reiciendis mollitia nobis.
Et et qui reprehenderit repellat ullam aut. Quo quam aspernatur veniam quis. Sapiente itaque voluptas dolores quis modi dolorum. Labore excepturi temporibus rerum.
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...