How would you explain the difference between the debt capital markets and leveraged finance teams in investment banking?

The key difference is that DCM focuses on investment-grade debt issuances that are used for everyday purposes, while LevFin focuses on below-investment-grade issuances (“high-yield bonds” or “leveraged loans”) that are often used to fund control acquisitions, leveraged buyouts, and other transactions.

What is leveraged and acquisition finance?

Leveraged acquisition finance is the provision of bank loans and/or the issue of high yield bonds to fund the acquisition of a company (or parts of a company).

Is leveraged finance the same as structured finance?

Leveraged Finance teams focus on high-yield, unsecured debt that typically funds transactions such as leveraged buyouts and M&A deals. Structured Finance issues more complex instruments linked to the cash flows of assets, not entire companies, and they may even work with the LevFin team to finance certain deals.

What is the difference between corporate finance and structured finance?

Corporate Finance has its eyes on maximizing the value of shareholders income through long-term and short-term planning and the implementation of various strategies. Structured finance is a convoluted financial device offered to borrowers with unique and mature needs.

What does acquisition finance mean?

Acquisition finance covers a broad range of financing structures where an existing company or special purpose vehicle (SPV) purchases all, or some of, the assets or shares of a public or private target company.

What does a Structurer do finance?

“A structurer saturates themselves with content and attempts to solve problems,” says Steve Wollman, managing director and head of U.S. structuring at Deutsche Bank. “At the most basic level we endeavour to figure out solutions and design products or exposures that meet our clients’ needs.”

What is the difference between structured finance and securitization?

In structured finance, banks and other lenders make loans. They take those loans, turn them into bonds or other securities and sell them to investors. Securitization – which is really a synonym for structured finance – finances car loans, credit card loans, home loans, equipment loans, small business loans, and more.

What do you mean by structured finance?

Structured finance is a financial instrument available to companies with complex financing needs, which cannot be ordinarily solved with conventional financing. Traditional lenders do not generally offer structured financing. Structured financial products, such as collateralized debt obligations, are non-transferable.

What is the difference between leveraged finance and syndicated bank debt?

Leveraged Finance is a broader term, and it includes Syndicated Bank Debt within its broad definition. You may know that Leveraged Finance is a fancy word for “Borrowing Money”, especially if you are a corporation with the not the highest credit rating. Bank Debt, or Loans, is a type of borrowing within Lev Fin.

What is the use of leverage ratio in finance?

Leverage Ratio. Leverage ratio is one of the most important of the financial ratios as it determines how much of the capital that is present in the company is in the form of debts. It also analyses how the company is able to meet its obligations. Leverage ratio becomes more critical as it analyzes the capital structure of the company and

How does leverage affect a firm’s capital structure?

It also evaluates company solvency and capital structure. Having high leverage in a firm’s capital structure can be risky, but it also provides benefits. The use of leverage is beneficial during times when the firm is earning profits, as they become amplified.

What are the downsides of financial leverage?

The downside of financial leverage is that you don’t enjoy the benefit of full ownership of the security. And if the investment moves against you, the loss is far greater than it would have been if the investment hadn’t been leveraged.