Liability Management in DCM

Hey monkeys,

Does anybody have any insight into what the Liability Management team does within DCM? I'm specifically talking about IB, not Asset/Liability management within a commercial bank.

From my understanding they help with debt exchanges and repurchases, but that is really all I have gathered. Someone mentioned to me that teams run fairly small (i.e. 6-7 at a BB).

Any insight into hours, team structure, LT career potential, etc would be very helpful.

Thank you!

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Comments (4)

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  • Analyst 1 in IB - Ind
Oct 5, 2018 - 2:57pm

Interned in DCM at a top MM last summer and we actually had a Liability Management teach-in to help us understand what the fuck those guys do.

I still have the print-out of the deck so I'll paraphrase the salient parts.

**What drives an issuer to consider LM**
- Achieve NPV Savings
- Reduce Absolute notional amount of debt outstanding
- Reduce future interest expense - accretive to earnings
- Minimize future refinancing risk / smooth maturity profile
- Remove problematic covenants
- Develop and maintain an efficient yield curve
- Recapitalize company
- Pursue tax, accounting, and cross currency arbitrage opportunities
- Keep credit story fresh

**LM typically works on these four main types of products**
- Open Market Repurchases
- Exchange Offer
- Tender Offers
- Consent Solicitations

**Hours? Team Structure? LT Career Potential?**

Everything below this isn't from the deck they gave me so take it with the consideration that you're getting it from a guy who worked there for 10 weeks on another team that was just really close to the LM team.

It's within DCM so the hours won't be as bad as traditional investment banking. I would say the LM team at my firm was in the office for more or less the same time that both the Domestic and LatAm DCM teams were.

In regard to team structure, once again, I've only ever seen the LM team at the firm I interned at last summer but it was super lean. Maybe 6-7 people. LatAm and Domestic DCM teams had about 2-3x the number of people. They didn't even take an intern. One of the LM associates that I grabbed coffee with mentioned how his team required no facetime and he was given much more autonomy than he was during his rotations in LatAm DCM and Domestic DCM.

lmao at LT career potential. If you end up in DCM in general you can pretty much forget about the buyside. At best maybe you can end up in some credit hedge fund or, more realistically, you can try to lateral into a LevFin team. Now in LM? get ready to stay in LM until you're in the dirt. Or, maybe, try to lateral into an traditional DCM team.

  • Analyst 1 in IB - Ind
Oct 5, 2018 - 4:19pm

I actually don't know if they had all been on the team for a while but it seems to me that when they got on LM they stay. The analysts go A2A fairly commonly but all of the senior bankers were "scalped" from other firms after they had done traditional investment banking.

I don't know if LM at my former firm it was a relatively new team or not.

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