What is loan capital markets/loans and acquisitions finance?
What is this desk in capital markets? What is is that they do, and how is the acquisitions financing different from what they do in levfin? It's pretty hard finding a lot out there about this desk...
Sometimes they call it "Loans and leveraged finance" as well. Would really appreciate any insight!
^ Citi fwiw
LAF at Citi focuses on products where the bank market is the investor.
Thank you! What does this mean in practice? So for an acquisition, they can get other banks to pledge money in a syndicate loan? Or does it mean that they lend to banks? Why would they do that?
Do you have any recommendations on things to read up on by the way? Difficult to find much online!
LAF deals with syndicated loans where the investors are the bank market across the rating scale, so both investment and non-investment grade debt. For LAF, PM me I can provide a resource.
Bridge loans for M&A I think
At Citi the team is called on paper "Loans & Leveraged Finance", but they are two separate teams, although they sit together with the GAM team (Sponsors at Citi).
The team is split into "Leveraged Finance" and "Loans & Acquisitions Finance". The Loans & Acquisition Finance helps with financing M&A acquisition which consist of helping to underwrite RCF, TLA and bridge loans. They do no modelling, and pretty execution heavy. Team is ranked around number 10 by banks and it is very CEEMEA focused. Majority of the deals and many of the seniors are from EM countries.
Not a good team to start your career in as it is not very technical. Many people came from corporate banking, and hours are chill, think 9-20 on average. Team is around 20 people with everyone wanting to go to sector teams. Just for reference, everyone on LinkedIn who writes "Loans & Leveraged Finance" is in the Loans & Acquisition team.
Culturally, the culture is not the best, with very stuck up VPs. How it differs is that they mainly focus on leveraged loans, and focus none on sponsor-led acquisitions and is very legal heavy.
Happy to answer any specific questions!
Thanks for this. I'm fine with not being on a technical desk, I find the legal aspect etc to be interesting anyway + I wanted to be on a debt product team.
Your comment about the culture is very surprising? Everyone I've spoken to have said the opposite. Could you maybe explain a bit more, please?
Is it only EM deals? I have an interest in Western Europe, and it seemed from their credentials they do carry out a lot of deals there.
I'm not looking to move to sector or coverage teams for what it's worth, anyway, I specifically ranked debt product teams.
As a junior you will not be enjoying the legal aspect as you are not the one who is negotiating or being part in the execution. As an intern / Analyst you will input parts of the loan agreement (covenants, margin ratches, pricing etc.) into a database for comps transaction. They will make you do this for many transactions and its rather a brain dead work rather than actually "understanding the legal aspect". In my opinion, its similar to DCM, you can learn everything in the job within 6 months. If you really wanted to learn about legal aspect, better going into distressed.
Usually RCF, Bridge Loans, TLA is seen as a "non-sexy" work since you are at the top of the capital structure, low spread, and dealing with super boring corporates. Maybe you will like it, but there is a reason why everyone after a year want to move into another team.
Look, culture is different for everyone and all teams at Citi are going to say that their culture is good. Know someone who was there 2 years ago and said that seniors don't give a crap about juniors and its a very political team
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