What does the Syndicate Desk do?

rfxm3's picture
Rank: Senior Monkey | 66

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.

Bluesilver - Investment Banking Director:

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:

  1. 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.
  2. 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)
  3. 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.

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Comments (61)

Nov 15, 2010

Correct. They then are in touch with the buyside hearing opinions on pricing, credit quality, spreads etc and determining where the deal can get done so that the corporate receives adequate proceeds and a manageable coupon while the bond still trades well in the aftermarket, keeping the buyside happy.

Nov 16, 2010

Thanks for your response, much appreciated. Do you know what sort of clients the sales guys for a syndicate desk would generally sell to at the point of issuance?

Nov 16, 2010

What are the exit opps for syndicate desks? Is the pay similar with other groups within the IB umbrella?

Nov 17, 2010

Hey Paul Allen,

I went and spent a few hours with Syndicate today and learnt a load about the area, think I will be taking an offer with them for Emerging Mkts. I can tell you for certain that the base is on a par with S&T Analysts, though I am not sure how bonuses in Syndicate compare - if anyone could enlighten me would be appreciated.

With regard to exit opportunities, you can go either way - preference for Banking and you are well positioned to go into Origination; if you prefer Markets then Sales is also pretty accessible. If of course you decide you want to stay in Syndicate then you will usually chose to specialise and work primarily in either Bonds or Loans for a specific area. Progress seems to be quick, and you will handling your own deals within the first 1/2 year there.

rfx

Nov 17, 2010

Is the Loan Syndicate desk any different from whats described above or is it the same thing?
And what do you mean handling deals so soon, you start pricing and contacting clients to obtain their business? How do the syndicate groups differ across the banks? Thanks!

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Nov 18, 2010
kiwiserv:

Is the Loan Syndicate desk any different from whats described above or is it the same thing?
And what do you mean handling deals so soon, you start pricing and contacting clients to obtain their business? How do the syndicate groups differ across the banks? Thanks!

The above was for both loan syndicates & bonds. It was just under one division of Syndicate - though it was split between people doing Loans & people covering Bonds, as well as by region/credit rating.

Yes - as in you will be taking on a debt issuance, pricing it and making sure your sales guys can get other banks in after just a few months of being there. (That was the case at the BB i went to in any case).

I think it sounds great, certainly for an analyst position, but would like to hear how bonuses are in this area!

Nov 18, 2010

So, what exactly is the difference between Debt capital markets and Syndicate?

Nov 19, 2010

RFXM3: Why was responsibility given so quickly at the Syndicate desk, were you able to gain trust and display knowledge in the area more effectively or is the learning curve of the product slightly flatter than some of the other desks which seem to wait longer before they give an analyst responsibility?

Nov 19, 2010
Bafoon:

So, what exactly is the difference between Debt capital markets and Syndicate?

Syndicate is looking specifically at Syndicated Debt, so setting a price for the debt where other banks will come onto the deal too & the issuer is happy. I guess as a role its more markets oriented than working DCM.

kiwiserv:

RFXM3: Why was responsibility given so quickly at the Syndicate desk, were you able to gain trust and display knowledge in the area more effectively or is the learning curve of the product slightly flatter than some of the other desks which seem to wait longer before they give an analyst responsibility?

I am not exactly sure about why responsibility is given quicker in Syndicate - and i dont know if it was just specific to the bank I was at and their management style, or a general rule of thumb. But it could be something to do with them being able to monitor you quite effectively whilst you work on a deal, and unlike say making a trade or calling a client in Sales there is time for them to check the price you have decided upon before going out and making the offer to the client, etc.

Dec 2, 2010

So there is the syndicate division which creates the product, ie a company wants to raise $1B so the bank finds a bunch of lenders and loans them the money and slaps on a AA or C rating on the loan.
Now there are also traders that trade these loans and they are a Syndicate Loan desk right? How does this desk trade these syndicated loans, what are some strategies? Thanks

Dec 2, 2010

anyone

Dec 2, 2010

This area has exploded over the past few years as gobbs of money has flown into PE (which leverages acquisitions with bank debt). Hedge funds, pension funds, and CDOs can't get enough of the product, which typically goes to support financing of highly leveraged companies or LBOs. From what I understand, it is pretty profitable because there is so much demand for it right now.

http://www.ft.com/cms/s/da0c8448-c77f-11db-8078-00...

Dec 2, 2010

which desk? I can tell u whether its good or not.

In general its a good market but for a while liquidity was challenging... with bigger loans coming from large LBOs liquidty has improved. There is more demand for LCDS and very true that hedge funds are very active sellers vs. banks hedging big exposure.

Daily tasks? dont know what they would have u do at intern level but I assume they need someone to make fun of for a summer?

Dec 2, 2010

Did work on credit deriv...dunno how similar that is to syndicated loan but I imagine some things are similar?
Basically, you'll calculate P&L, book trades, settle risk with middle office, and check all the models in the morning and at end of day, that kinda stuff (along with the general intern stuff). I was near cds, on the sct desk, there was a good amount to be done on both....

Dec 2, 2010

Investopedia Says... Mainly used in extremely large loan situations, syndication allows any one lender to provide a large loan while maintaining a more prudent and manageable credit exposure because they aren't the only creditor.

Dec 2, 2010

I don't work in syndicate, but I'm pretty sure this is wrong. "The syndicate" for a loan is different from a "syndicate desk". I remember talking to a guy from a syndicate desk at my bank about what he does, and I remember thinking it sounded similar to a sales-trader - you don't trade, but you know more about the product than a strict salesman, and you interact with both traders and structurers. I know that's not a very good description, maybe somebody else can help?

Actually, I remember thinking that his job sounded exactly like the guy from office space who didn't really do anything except "communicate" between the engineers and the guys taking specifications from customers (you know, the real neurotic guy on the verge of a heart attack). This seemed to be a pretty accurate description of the job at the time, but it was at an open bar and I had had a few, so...

Dec 2, 2010

The syndicate is the bridge between the private side (e.g. the HY/HG bond origination group) and the public side (institutional sales force).

Dec 2, 2010

deal with/field questions from investors. go to meetings with bankers, lawyers, go on pitches, roadshows, keep up to date data on new issues/valation benchmarks/volume information IPO or equity linked offerings/make pitchbooks/other shit.

i never worked in ECM but worked with every level from intern to MD. this is the best that I would describe.

if you wanted more info on what an analyst does..hopefully someone else will field that one.

We're about to enter a Great Depression.
Don't you want a president who's already dressed for it?

I'm making it up as I go along.

Best Response
Dec 2, 2010

when there are ipos, you are involved in the marketing process from inv education to roadshow to book close. you'll be talking to sales people for feedback during the mkting process, feeding the f'back to bankers, working w/ ecm bankers on sales points update during the deal ensuring that the right message is communicated to the salespeople who then communicate the right message to investors. communication is key to get investors into the book. you also manage the book - update the bankers when the orders are in, who the major accounts are, the price sensitivity of the book and the bankers will then use the info to discuss w/ m'gmt. you're also involved in the pricing process - you want to find the best price for the corporate and the investors. you talk to traders to make sure the orders are entered in correctly on their end. when books close, you then manage the pricing process and allocate the stock to investors. allocation itself is an art because you want to make sure you keep the investors as well as the corporate happy.

when you launch a follow-on its a similar process but a shortened version. the marketing process is usually shorter. for overnight block its only one night for the marketed follow ons it can range from 2-10 days or more.

in syndicate you interact w/ sales salestraders bankers lawyers etc. when you are senior you will talk to investors and make sounding calls etc. when you're junior you do the grunt work - work on email templates pitchbooks etc. syndicate work is similar to ecm work but its diff in a sense that you're the link b/ bankers and sales and you are closer to the mkts.

coordination mkting multitasking and communication skills are crucial to the role. you also hv to be tough and thick skinned. you also need to be assertive and talkative (you work w/ so many ppl). in a way, you are a salesperson but you hv to be "tougher" than a salesman because a lot of ppl will give you shxt or ask you for shxt during a deal and you hv to say no. ATD is crucial to the role since you're the one in charge of the book

its not a good time to be in syndicate now given the lack of deal flows.

    • 3
Dec 2, 2010

just took a closer look at your post

fyi there are v few syndicate roles around. each ibank only has like 2-4 max syndicate (at least in asia) think there're more in the states

hrs are decent (12-13 hr days on good days) when there are no deals. when there are deals you can work 14 hrs-overnight. usually don't hv to work weekends but you sometimes hv to.

pay is good relative to the hrs you work i think. depends on which bank you work for too. don't expect enormous bonuses but i think the pay is good

exit strategy - i'm figuring that out myself too and am having a hard time given this economy. in a way you're v specialized and you're pigeon-holed as the ecm/syndicate person. you can move back to sales. you can also move back to ecm or corp finance (if you know the contacts). it really depends on what you make out of your situation honestly. what i can say is in syndicate you're a jack of all trades. you need to know think on the spot and know a little bit of everything. you can also move to the buy side and be a syndicate conduit - the person who is responsible for screening which ipos/fos to buy. the person who the ecm syndicate contacts when a deal is launched. since syndicate isn't really an "analytical" role like research, it will be tough to move to PE (correct me if i'm wrong). i wld say that you need more soft skills in syndicate. of course it wld help if you hv solid quantitative skills but you dont need to be a math whizz to be a good syndicate person

when you're junior, you help ecm bankers on their pitches as i said earlier and you help execute the deal. you do the grunt work, punch in the numbers to the book, ask salespeople for f'back, compose email templates

as you gain more responsibilities you'd be more involved in the allocation process and you'll talk to investors more often

bed time for me but let me know if you hv other qs

Dec 2, 2010

Equity syndicate varies by bank. Some banks you see a lot of action, so it really depends on which bank's ecm/syndicate desk you go to. Hours at banks with a lot of dealflow (MS Citi GS) are bad (8 to overnight sometimes)

Also, I get the imperssion ECM/syndicate has a lot of people who could not get into ibanking proper or couldnt deal with the hours. For example last summer my friend (an intern) at Credit suissee knew a british girl who interned in sales but knew she would not get an offer there so tried to drop her sales internship and get into syndicate/ecm because (and this is exactly what she said) her boyfriend worked in ibanking and wanted her to work in a bank too. She had NO real interest at all in ibanking and basically was there to get a "easy job" in a bank that others recommended. According to her, syndicate was the "easiest" job after sales. She ended up shxtting on another intern there to "help" her with work while she went out and went to high school reunions or partied...... that's the bad rep ecm/syndicate people have. I think it's fine if you like that kind of job but you learn nowhere as much finance as corp fin/ibd and the work is nowhere as intense.

I guess there are some people who actually like it. They stay on but some other people try to move into corp fin for their 3rd year before they have a shot at exit opps to PE. If PE is your goal, don't go to Syndicate.

Dec 2, 2010

how is Citi's ECM? And why does Citi separate its LevFin and ECM from rest of IBD?

Dec 2, 2010

Syndicate is technically within IBD, straddles between what many think of as Investment Banking and Sales and Trading. Know people who moved from Syndicate , after feeling like they learned all that they could, to an industry group in IBD. Even if they don't build the models, Syndicate people still have to understand them. Not sure about the specifics but got the impression that people in syndicate do quite well in industry IBD afterwards.

Breaking Bankers
http://chasingconsultantsbreakingbankers.blogspot....

Dec 2, 2010

Syndicated loans are part of the origination team at a bank. This could be part of investment grade debt or leveraged finance. Could you please post more information regarding the position? You will be doing credit analysis, analyzing industries, and putting together pitches for the rating agencies and sales teams.

Dec 2, 2010

Investment grade is synonymous with less modeling, more pricing/comps/etc.

That said, deal flow is always big at BAML/JPM, and pay is similar, at least at the jr. levels.

Dec 2, 2010

This is the farthest thing from pure IB, no financial modeling at all... you are on a syndicate desk (trading desk style) talking to investors and pitching new issues, facilitating trades w sales-people, educating sales-people etc -- always dealing in investment grade rated corporate issuers. Most transactions are super fast and there is no modeling on that team. All deals are valuation driven - can Coke use bank A to trade (issue a bond) at 10bps better than another bank? If yes, then go with bank A - done.

Dec 2, 2010

So the description on there being financial modeling is just for show or an embellished point?

Dec 2, 2010

I don't think any group at BAML is considered very good though, so this group is probably fine for BAML.

Dec 2, 2010

Thanks analystforhire and DurbanD. Anyone else who's worked for BAML or got a buddy in the group currently/in the past care to add, or has a different view?

Dec 2, 2010

Term B --- i guess embellished could be the right word. You will interface with the Debt Capital Markets team, who interfaces with the industry banking team (who owns the client relationship and the financial models).

You are literally on a syndicate trading desk and helping institutional investors get into new bond issues and salespeople sell these new bond issues, managing the entire allocation process. Try to ask HR if you can get a call w/ a jr person on that desk and ask them point blank what kind of financial modeling they do.

Dec 2, 2010

Depends on the the product and bank.

There are syndicate bankers who work with the clients, do the valuations/due diligence, and issue the loans. They would either sit on another floor or in a special area on the trading floor--glass enclosed work area/behind security door.

There are also syndicate people who are very similar to sales people only they specialize in selling the new bonds to clients. They are a go between the bankers who make the loans and the normal sales people who sell bonds to their clients. They work on structuring the deal (tranche size, fixed, floating, etc) and answer questions that normal sales people might have.

Dec 2, 2010

Where I work syndicate is separate. The salesforce that flogs the issuances is not considered part of it.

Dec 2, 2010
puax:

Where I work syndicate is separate. The salesforce that flogs the issuances is not considered part of it.

Would it be a compliance issue if the DCM Syndidate guy sits just next to the Credit Trading and Sales guys (basically they are rubbing shoulders....)?
Thanks for enlightening!

Dec 2, 2010

Sybdications sells down a banks hold size. They'll work with originations and provide market color, insight etc. You need this when deciding best efforts or fully underwritten. Depending on the bank size you might do more than just put together bank groups. It's a lot of talking with other banks, managing a process, stuff like that. Very transactional, but not in depth like in banking.

Exist ops would mainly be to corporate banking if you had some credit experience, maybe to other groups within DCM at the bank or other banks.

Dec 2, 2010
TNA:

Sybdications sells down a banks hold size. They'll work with originations and provide market color, insight etc. You need this when deciding best efforts or fully underwritten. Depending on the bank size you might do more than just put together bank groups. It's a lot of talking with other banks, managing a process, stuff like that. Very transactional, but not in depth like in banking.

Exist ops would mainly be to corporate banking if you had some credit experience, maybe to other groups within DCM at the bank or other banks.

Syndicate is a sweet fucking job. Why would you want to exit? Show up at 7, go home at 5:30, no accountability (so great job security) and good comp.

Dec 2, 2010

Thanks for the insight. I just want to confirm-are you referring to DCM/ECM? I know a lot of Corporate Banks have syndication teams but want to know if there is a difference. Maybe that's the 7-5 job that mrb is raving about.

Dec 2, 2010

Point me in the direction of a sybdications tions group with those hours Haha.

But yeah, I've been a big proponent of capital markets for a bit. People avoid it because it lacks the exit ops, but the point is you get these gigs because you don't want to exit. But I agree, it's generally a good job.

Different banks run shit differently though. Like if you go to a MM bank it can be a lot different than say at a BB.

Dec 2, 2010
TNA:

Point me in the direction of a sybdications tions group with those hours Haha.

But yeah, I've been a big proponent of capital markets for a bit. People avoid it because it lacks the exit ops, but the point is you get these gigs because you don't want to exit. But I agree, it's generally a good job.

Different banks run shit differently though. Like if you go to a MM bank it can be a lot different than say at a BB.

Well, maybe not at the junior level, but hours in pretty much any Capital Markets Group get pretty light once you hit VP if not associate.

Specific hours/lifestyle can definitely could be bank-dependent, so YMMV. But regardless, they are definitely better than in any IBD group and you will be comped well. Syndicate gets a cut of every capital markets deal and companies always need to do deals.

Dec 2, 2010

Awesome place to be, very tough to get into though. Very little turnover since its such a coveted spot. Better off starting out in S&T or Capital markets. would create the most likely transition to syndicate.

Dec 2, 2010
SoontobeHBSer:

Awesome place to be, very tough to get into though. Very little turnover since its such a coveted spot. Better off starting out in S&T or Capital markets. would create the most likely transition to syndicate.

From my experience, this is accurate.

Dec 2, 2010

I agree that it is a tough position to get into due to the small team size but I don't think that it's a great place to start a career. The skill set you acquire isn't too 'useful' and the exit opportunities are quite limited (sales or DCM - both of which you can get into straight from graduation anyway if you want to go down those routes).

The role is quite relationship-focused and you follow the markets closely so that you can price the offering. Overall, I would say it's a very comfortable role in banking (because the lifestyle seems decent) but not particularly interesting.

Dec 2, 2010

Yeah I'm in MBS trading and to me they just seem like Sales people who do new issue stuff instead of stuff that's already trading in the secondary markets. So it's like Sales but slower paced and with less market knowledge. Then again the group for us is tiny (like maybe 3% of the total population of the MBS floor) and I've had almost no exposure to them so I really don't know, maybe it's awesome.

Dec 2, 2010

Yea i am not sure where the first person got the "very coveted" from. I tend to agree with the poster above me, in my head they are more like new issue sales people. I think the job sort of comes down to pricign something so that it performs well (so that the end investors are happy) but not too well (so that the issuer isnt mad that he lost money).

Dec 2, 2010
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