Where does the debt syndication desk sit?
Does debt syndication sit with sales and trading or debt capital markets? Are they on the trading floor?
Please advise!
Does debt syndication sit with sales and trading or debt capital markets? Are they on the trading floor?
Please advise!
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dcm at banks like jpm but at others it’s under corporate banking
Are you talking loan syndication or bond syndication. From what I see the former typically sits with corporate banking/ib while the later sits with DCM. Neither sit with S&T
Was talking about bond syndication. Thank you so much! This makes sense.
Usually DCM
corporate banking or IBD (depends on setup of bank)
they will not be on the trading floor as they work on the private side of the market
How are responsibilities split between lending from the corporate bank versus leading/arranging the syndicate and marketing? Does one group do all of these or is it split up?
lending is more client facing: deals with the client ( model / documentation with the client etc)
syndication is more market facing: they will take the loan that was underwritten and sell it to market in a secondaries distribution OR (if it was a best-efforts deal) go to market and judge appetite for the piece and conduct a primary syndication
I was in loan syndications, although it was a few years back. It is so underrepresented and underhyped. I loved it, it's great work, if you work for a name bank, you'll work with major, recognizable clients, may have opportunity to meet/work with their senior management, depending on the situation (sometimes it's just a roll-forward of an existing facility, although for my mortgage banks, those are the clients I met with annually and knew the entire C-suite at an Associate!).
Corp RMs are doing the credit analysis/underwriting, and you take on the debt modeling analyses and various downward (e.g. haircut) scenarios, deal pricing, syndication strategy, marketing strategy. That piece was included in the credit committee submission, and we attended committee and presented our piece or responded to questions. Since the bank will lend a piece as Lead Arranger (at least in my case), we needed to back up our pricing and syndication strategy. With pricing, you do comps analysis, so you get to know the market. You prep a pitch, a CIM if you win, etc. We used to go to market with a bank meeting, kind of like a one-stop road show, and then work with our sales team and the other bankers or fund investors to help them with their committee submissions. Closing, funding, fees, etc. Amendments and waivers, as needed. Even renewals are interesting, because you're working with a client over a period of years, and see their businesses evolve, handle issues or transactions as they arise and may be involved in restructuring where needed. It's very interesting, really smart people, really not so "second fiddle" to IB (I've done both). It's its own interesting segment. You have a lot of interaction with legal (at least I did ) and negotiating the credit/security/guarantee/intercreditor docs, learning a lot from them. There's time and multiple- transaction pressure just like IB. I'm not sure why it's not more hyped, it's a very important means of providing capital and financing for the country.
Super helpful, SBd
Thanks for posting this. I'll be joining Leveraged Finance at a top BB, and I think the reason why its under hyped its firstly because most people on this site are obsessed with EBs- they are obviously great financial advisory firms, but they do not have any lending structures that are remotely comparable to the BBs. Also, most people going into banking will end up in coverage just due to the fact that there are more roles available. This all leads to people not investigating groups like syndication finance and so forth, which then leads people to believe that it isnt a good group.
Is this the kind of work that would be done in a DCM Investment Grade IB position? Thinking in terms of a bank like JPM or BAML where DCM sits in their banking division and not separate like MS or in a Levfin group
100% agree! I’m in the same space. good post
Totally agree. Syndicate seats are fantastic opportunities to grow, learn and develop.
This is super helpful! Looking to potentially enter this space - do you mind if I send you a DM?
At the BB i'll be joining I think they sit near DCM. This is for IG Bond Syndicate.
Nice, congrats - good luck.
In my experience, IG bond syndicate was on the trading floor, behing a Chinese wall, with DCM but on the front row and directly facing IG credit S&T. They usually yell at each other whenever there is a new issue. Also, they need to talk a lot with bond salesmen to make sure they don't jeopardize any buyside relationship they both built on primary/secondary markets.
It sounds like quite interesting work. Anyone know what the typical exit opps are like?
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