What exactly does the syndicate desk do?
From my understanding, they are dealing with corps on the FI side of things and structure a debt package which their sales guys then go and push to clients.
A Brief Definition of Syndicate Desk
A syndicate desk is a team of individuals responsible for researching, marketing, and pricing larger deals on the sell-side, particularly bonds, loans, or stocks of companies. They are also referred to as a syndicate team and are important for corporations trying to launch a new deal to market. They want to get the right price so attracting the right buyers.
When getting ready to launch a new deal, the syndicate desk gathers the necessary data to do it properly. Someone from the syndicate team performs research by working with investors and banks, as well as any other related parties, to better understand the market. Once the data is prepared, they report it to the company wishing to launch the new deal. It is with this information that they are able to collaborate and put together a feasible, and sellable recommendation.
Check out how the syndicate desk flows with other parties in this photo from Iota Finance
How are the syndicate desk and syndicate loans related?
While the syndicate desk will often be responsible for putting together a syndicate loan, it is but one of the tasks the do. A syndicate loan is a loan put together by a bank through multiple lenders. They are usually used for larger deals, reducing the individual risk of a creditor by spreading it across several. The syndicate desk is responsible for finding the lenders and determining the terms of the loan by putting together the appropriate market research.
In terms of working on loans desk would echo the difference between Leverage and IG - however also make the following observations of a larger Banks function:
- Origination - is the pitch side working with the coverage teams and credit - regarded as a specialist structuring functions guiding on price, market conditions, expectations, trends, documentation, guiding and pitching etc.
- Syndicate and Sales - there can be a crossover between 1 & 2 however generally the sales desk is the reach out to market, understanding what other smaller Banks, funds, CLOs etc are looking for or what they may like. A deal can be an open market or often limit to whitelist or bank list where the issuer will say I.e. we only want x or y bank or for example, a commodity trader may have x2 RCFs on targeted for Asia market and another for European (Mercuria for example)
- Loan Trading - this is another important function of the Syndication function dealing with trading of existing loans and the Banks portfolio optimisation - as mention a lot of BB banks operate an originate to distribute model, but equally will run a trading book on "flow names" such a leverage credit which investor regularly buy and sell plus selling down from portfolio
The syndication function can also extend wider to other forms of finance i.e. banks will sell down and risk share trade finance deals (see BAFT MRPA for standard) or real estate finance, FI deals, PXF, project finance basically all types of debt.
Read More About Research Positions On Wall Street Oasis
- Loan Syndications Group Info
- Breaking into Private Equity from Banking
- Equity Research Career Path Advice
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