Leveraged Finance - Views on the differences between BoA and JPM

Hi Everyone,

Just wanted to get your views on the differences b/w BoA and JPM Leveraged Finance. I know that they are tops in the field on Wall St., but what makes them unique, where would you go, and how do these groups position a person for the future (B-School, etc.) compared to other groups at the banks? Thanks!

 
Best Response
soccrkid8:
Hi Everyone,

Just wanted to get your views on the differences b/w BoA and JPM Leveraged Finance. I know that they are tops in the field on Wall St., but what makes them unique, where would you go, and how do these groups position a person for the future (B-School, etc.) compared to other groups at the banks? Thanks!

Deutsche Bank is up there too and those three are perennially the top players in the LevFin market.

To answer your question, BAML and JPM's LevFin groups differ in that the are often the lead-left banks on the key LevFin deals out there. If you are lead-left, it means you are essentially arranging the terms of the deal and doing most of the work. As a result, analysts and associates who are leading the deals do a lot more modelling and structuring of the deals, compared to their lead-right counterparts, who are simply just on the deal to provide additional financing.

LevFin and M&A are the two most technically-challenging groups out there and the most competitive placements to get. As a result, placement into top PE is a lot easier since buyside firms love to hire from these techically-rigorous product groups. Consequently, this will help with b-school admissions.

Imo, JPM is a stronger than BAML. Even though BAML typically does more volume, JPM operates with a lot less people (and DB even a lot less than JPM). In terms of prestige and training, all three represent some of the best groups in banking.

 

Its a balance sheet intensive product so most of the large commerical banks can do it. As for JPM and BoA they have large balance sheets and strong dealflow that makes them them the standard. Even more prestigious banks such as GS and MS have small LevFin groups because they can structure and syndicate but not commitmet large amounts of capital/underwrite.

HSBC has been on some great deals including the Renyolds and Gramham Packaging but still not at the level of the top tier. Same as Citi. No reason they shouldnt be very competitive though.

 

The desk should be competitive in the market or the outgoing analyst should be competitive in the job market? 'competitive' as in do 'ok' or as in megafunds/ top 5 b-schools?

I understand MS don't do their own modelling - big downside for exit op competitiveness?

Clearly many more variables involved, but as a guide.

Thanks

 

I can speak to BAML Lev Fin some. The group is split between New York and Charlotte, with New York taking care of the HY Bond work and the CLT office dealing primarily with the Leveraged Loan space. BAML is #1 in the Leveraged Loan space and they left-lead about 25% of LL deals. They are #2 in in the HY Bond space behind JPM. It is an interesting group to work in as the deals aren't nearly as cut and dry as Investment Grade work. Contrary to some things that I have seen on here, LevFin for BAML does the hefty lifting for the modeling and quantitative work while getting support from the industry group that will also be working on the deal. You'll see a whole wide range of deals done (anything from refi's, LBO's, dividend distributions, etc). It's a great space to work in because you get to see a variety of deals, and a lot of them.

Feel free to PM me if you have any further questions

 

For BAML, LevFin does model but its only the typical stuff like cash waterfall, etc. I'm assuming what most people refer to by modeling are the hardcore LBO models...that is run out of Sponsors with the industry groups providing input or by the industry group alone depending on the deal. You will be able to learn a ton about capital structure and different tranches of debt in an LBO though coming from LevFin. So in regards to modeling in general, LevFin does not really do a whole lot except for when it comes to the debt portion of the model.

From what I've heard from many analysts is that if you want exit opps for PE then sponsors is the best group in the bank. I've even talked to people from LevFin and they have echoed this. LevFin at BAML is more capital markets oriented although you do see LBOs of course. I would say its the exact opposite from JPM where the LevFin team is seen to be strong and the sponsors group is pretty much just coverage. At BAML the LevFin team Is more cap markets focused and the sponsors group is very good (best,most competitive group in bank).

 

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