Quote from WSJ:
The department is expected to tap PJT Partners Inc., Moelis & Co. and Perella Weinberg Partners for help with the airline portion of the $2 trillion stimulus bill, according to people familiar with the matter. Each bank is likely to advise on aid to one of three subsectors: commercial airlines, cargo carriers and firms critical to national security, such as Boeing Co., the people said.
Thoughts? Obviously the BBs are conflicted out, but seems like a big coup for Perella. Would be interested to know what kind of fees the government is paying.
Big W for PWP
Big W for each of them
The best decision by governments is whenever they outsource things. The value:cost ratio is much higher regardless of the fees they’ll pay compared to them doing it in-house.
Feels like PJT/MoCo/PWP wouldn't net a huge fee from it and would likely only be paid at cost. The optics of the gov paying millions in fees to banks don't bode well. Might just be doing it as a favor to cash in on later
but then again the EBs are largely out of view of the public
For some reason I have this feeling that it's going to be smaller than we think. Just looking at Miller Buckfire's RX work for Detroit, they were paid 23MM in fees all said and done. Remember, these are still government mandates, not private mandates, so your usual and customary may not apply here.
Great point, think the fees will be lower but it's obviously an amazing mandate to have. Will be nice to tell clients that the treasury department picked them.
Where's evercore / lazard / guggenheim / HL?
Or where's HL? Just a guess, but like with most restructurings, it's probably more lucrative to be advising the airlines (i.e. a debtor mandate) than it is to be advising the government (i.e. a creditor mandate).
That's a legit Q though. HL is THE creditor advisor and much stronger in it than with debtors (although still highly ranked!)
Perhaps has to do with Evercore and Lazard's ties to the democratic party/the political leanings of the big cheeses at those banks. I believe Lazard had a similar mandate advising the Obama admin re auto mfrs in 08/09ish.
Tbf PWP has pretty close ties to the Democrats (although PWP also has close ties with the Republicans among its senior ranks, most notably with Bob Steel).
I'm not an RX guy, but keep in mind these government assignments, while high profile, tend to pay lower fees than the private sector and have a heightened level of public scrutiny
I've heard anecdotally that there is so much RX business right now that all the tier 1 shops are selectively picking their spots and turning down huge capital stack opportunities due to lack of time/resources. EVR/LAZ/HL etc could be occupied
If you think PJT / Moelis / PWP have excess capacity relative to EVR / LAZ / HL right now or that any of the latter three turned down a mandate of this caliber, you're mistaken. This is a franchise building cred, regardless of fees.
The mandate decision ultimately came down to relationships as the poster above referenced.
net tax payers continue to lose either way
No RX shops like Alix? Or would they work with the banks?
Debtors can still hire Alix, counsel, and their own IBs (HL/Laz/EVR/GHL)
PJT- passenger airlines
Moelis- Cargo airlines and contractors
PWP- NatSec companies
NatSec = National Security? Defense then?
Big one is Boeing, but anything critical to security not just specifically defense
Mnuchin just confirmed on national television
Under the Treasury program, Mnuchin said, there would be no big fees for banks, adding they’ll be taking what they would for charitable work.
Nice.
Paid in Goodwill Bucks
Exactly. This is all about branding. These guys are being paid nothing to enhance their reputation for further workk. It feels like what I said earlier about Miller Buckfire getting paid 23MM for Detroit will be true here - these guys will make a small amount given the potential size of the restructuring and cement their future business on the fact that they handled this kind of work.
Big win in a sour environment
According to Bloomberg, Moelis got it because of Eric Cantor and PWP got it because of Bob Steel.
No specific relationship called out for PJT so I guess they just got it because they are the best at this kind of thing.
Also apparently Millstein / Guggenheim mandates on American Airlines.
Source for Gugg/Millstein being on AA?
Public info. Millstein advised a decade ago as well
“According to Bloomberg...”
Is Moelis DC just Cantor?
Also think they have a metals and mining group out there.
Does anyone see any additional summer internship opportunities opening up in RX as a result of the no. of deals increasing?
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