杠杆融资(also known asLevFin or LF)是Investment Banking Division (IBD)of a bank that is responsible for providing advice and loans to private equity firms as well as corporations for primarily:
- 杠杆收购,
- Recapitalizations,
- Refinancing old debt, and
- Mergers & acquisitions.
债务融资(或利用)通常是作为一个完成的means to boost returns on a potential investment if a company doesn't have enough capital to purchase the acquisition outright with cash.
LF的主要区别之一是它们主要关注发行投资级低于债务。Firms in this below-investment-grade category often have a higher default rate, higher risk, higher leverage use, and less consistent operating results. To offset this, debt issuances to these firms often have a higher return. Each deal the client presents may be different and as a result will require different solutions.
杠杆融资Group Definition
LF departments work on acquisitions (LBOs), recapitalizations, and asset purchases. Companies looking to do any of those things can do so using debt, and it is cheaper to use debt than to use equity or cash.
Although this group andDebt Capital Markets (DCM)teams both work with debt, theDCMteam works more with investors and the markets while the LF team works with the实际公司on the structuring of the deal. They typically make money by earning fees on the debt they help raise and advise on. One of the most prestigious LF groups is within J.P. Morgan in Europe. Leverage is sometimes referred to as 'gearing' in European countries.
What Does Leverage Mean in Finance?
只需将“杠杆”一词列为“债务”一词的代名词。在金融中,“杠杆化”是指使用外部资金,通常将资本作为产生或最大化潜在投资回报的手段(此债务与其他任何人一样成为资本结构的一部分)。公司通常可能会选择在其项目中使用杠杆作用,因为与通过IPOor secondary offering. In the capital structure, secured bank debt (backed by collateral) is typically senior to unsecured debt which is more common for LF teams to be involved with. Both of these types of debt are senior on the capital structure compared to mezzanine, preferred or common equity.
公司使用杠杆是好还是坏?
Properly managed leverage can be a great strategic tool for companies that lack the buying power or capital of larger firms. From a private equity fund involved inLBOs, leverage is one of the main ways they generate outsized returns for their LPs, so it is critical to their business model.
Of course, with this use of leverage, it will also increase the potential downside risk of an investment. Mismanaged leverage can easily burden a company and too much debt may increase risk for those holding equity in the company. An example of this would be a corporation undertaking a risky project or investment using leverage. If this risky investment didn't go the way the company planned, it could leave the company in a vulnerable position where the equity position in the company compromised (or in a bankruptcy, sometimes completely wiped out!). As a result, too much debt on a company can lower the valuation of a company since it increases the risk of it as a going concern.
杠杆融资投资银行业务吗?万博app网页版
Yes. The LF group is simply one division in theInvestment Banking Division银行和他们通常与银行中的并购团队紧密合作。
What Do LevFin Teams Do?
LF teams in a bank can act as a middle-man between the investors and the company seeking to raise funding. This team will often work on structuring the deal, often act in an advisory role, and work on the eventual execution of the deal.
尽管their work is similar to those in aDCM作用,关键的区别在于他们的客户,which are typically private equity (PE) firms. Members of this team will often be: communicating with clients, analyzing and examining the credit/risk profile of their clients, structuring debt for the deal, and analyzing potential returns of the debt.
What is a Typical LF Deal?
These deals typically include a large sum of debt, typically up to a point where 50-60% of the capital structure is debt (compared to 50-40% equity). These deals have the added benefit of increasing a project'sInternal Rate of Return (IRR)。
Due to the riskier nature of the transaction, the return on the investments is much higher than secured bank debt, and is often referred to as高产。The deals are usually specific and require custom solutions from those on the LF team.
Leveraged Lending vs LevFin Groups
At the base level, this is the key difference between the two: one is a firm, usually in theMiddle Market (MM)while the other is a division within a firm usually in aBulge Bracket (BB)。LF groups at aBBbank (BofA, JPM) operate more similarly to a GE Capital, just on a larger scale, both in terms of clients and the average size of each transaction. They will also provide clients with access to the bond market, which can include high yield bonds. Public bonds are not a common method of debt financing in the middle market given that most of these companies are private. However, leveraged loans and unitranche debt have taken on a lot of the structural characteristics of a High Yield debt in Credit Agreement terms (e.g., cov-lite, basket definitions, Available Amount).
Leverage Finance Investment Banks
Due to the nature of the business - lending extremely large amounts of capital - boutiqueIBstypically can't have a slice of the LF pie. Besides the bulge brackets in the space, middle market firms like Jefferies,RBC和GE Capital也是大型参与者。对于退出机会和声望,与您合作的公司是未来成功的最大因素之一。要考虑的另一个因素是该银行部门的交易流量:确保您的银行拥有适当的交易流量将极大地帮助退出机会。这是LF中一些最佳名称的详尽列表。有关更多信息,请参考我们WSO公司数据库。
- J.P. Morgan
- -American Multinational Investment Bank and Financial Services Holding Company
- -Statistics and Breakdown of J.P. Morgan
- -J.P. Morgan's Leveraged Finance Ranking
- Bank of America Securities
- -American Multinational Investment Banking Division
- -Statistics and Breakdown of Bank of America
- -Bank of America's LevFin Ranking
- Credit Suisse
- -Global Investment Bank and Financial Services Firm
- -瑞士信贷的统计和细分
- -Credit Suisse LF Workplace Culture
- Citi
- -Global Investment Bank and Financial Services Firm
- -花旗的统计和分解
- -花旗集团——杠杆融资Thoughts
- Goldman Sachs
- -American Multinational Investment Bank and Financial Services Company
- -Statistics and Breakdown of Goldman Sachs
- -LevFin's Role at Goldman Sachs
- Morgan Stanley
- -American Multinational Investment Bank and Financial Services Company
- -摩根士丹利的统计和细分
- -Morgan Stanley's LF Division Compared to its Competitors
- Wells Fargo
- -American Multinational Financial Services Company
- -富国银行的统计和分解
- -Wells Fargo LF Exit Opportunities
- Barclays
- -British Multinational Universal Bank
- -Statistics and Breakdown of Barclays
- -Barclays Work Culture
These are only some of the top players in this space. Visit ourWSO公司数据库to find more information about each company.
WSO Company Database
Gain Access to Exclusive Data on Compensation, Interviews, and Employee Reviews.
Sample Leveraged Finance Interview Questions
Getting through the LevFin interview process can be a challenge since there are often questions involving complicated debt structures. Interviewers may ask you questions you weren't expecting or complicated brain teasers. To help you get a flavor of the types of questions you can expect, we've compiled a list of leverage finance interview questions examples from our company database as well as the answers these applicants gave.
For a more comprehensive list of LF interview questions reference ourWSO Company Database(filtered for this specific group) or this discussion for some morebrain teasers。
Frequently Asked Interview Questions
Software company because of recurring revenues from annual contracts that are even more guaranteed than a hardware store, assuming that both companies are mature.
最高到最低:信用卡,汽车贷款和抵押,因为有汽车贷款和抵押贷款有抵押品,只有较低风险概况的人有资格获得抵押,因为他们有收入和教育等等。汽车贷款更高而不是房屋贷款,因为汽车损失其价值要快得多。使用信用卡,Visa无法追赶您购买您购买的烹饪餐,因此没有资产可以抵押。
TIPS. Treasury Inflation Protected Securities
Note: This answer was very specific to Europe. Hard to do deals due to the regulatory environment, still some opportunities left in Italy/Spain where regional banks are still consolidating, potential in eastern Europe as well. Western European banks are too scrutinized to do anything big.
I first talked about calculating the purchase price from the entryEBITDAmultiple. Then I mentioned the financing of the transaction and talked about how the cost of financing will impact the transaction. Then I talked about using assumptions to build a three statement model. Finally, calculate the money multiple for sponsor equity and get theIRRfor the transaction.
To see how other users answered this question, reference thisforum
Scale, seasonality, leverage, margin profile, raw material commodity risk.
Current ratio, quick ratio, cash ratio.
DCFvalue will have higherEVbecause lower beta means lowerWACCwhich when discounted means higherEV。
- 发行债务的主要专家是,它更便宜,并且不涉及业务中现有的股权所有权
- The major con is that debt is a fixed cost, and no matter what happens you have to service that debt
- 公平的主要职业是,它不会在将来为企业创造固定成本
- The major con of equity is that it dilutes the existing ownership of the business
- For a more comprehensive breakdown visit ourforum
Lots of fallen angels because of COVID-19 so credit is becoming increasingly high-yield.
Hours, Salary, and Daily Work of Leveraged Finance Bankers
As part of the Investment Banking Division (IBD), the hours, salary, and daily work for those in LF are comparable to those in other areas. Key distinctions here are, long and difficult hours, salary + bonus of around $130,000-$180,000 a year, and daily tasks such as structuring leveraged loans and assisting with"Leveraged Buyouts (LBO)"。鉴于客户的动态需求,该组的银行家可以执行从
- Credit analysis,
- Writing approval memos,
- Talking to investors, and
- Financial modeling.
The needs of the clients are always shifting and as such, bankers are often forced to come up with novel and unique solutions that fit their specific situation. Compiled below are some personal accounts from otherWSO成员在这些小组中工作的经验。
LevFin Work Hours
What are the hours like in LF groups? How do those hours compare to M&A? Do those hours vary by firm? Answers to all of those questions from @exADbnkr13".
I worked as an analyst, up to Sr. VP in Lev Fin - first at a mid-size bank, then at 2BBfirms. I had first started my career inM&A在BB, so I have a good sense of comparing the 'brutality', if you will. I would say that Lev Fin is on par withM&Aas having the most grueling hours. The reason is really the client base. If you're working in Lev Fin, your clients are predominantlyPEfirms, and they are (obviously) the most demanding, time-sensitive clients to deal with.
Hours are just as gruesome asM&A, 70-80 hour weeks are the norm, and 100+ when it comes to crunch time. As for what you spend your time on in LF, it's mostly credit analysis and modeling - although some firms don't do any modeling whatsoever.
LevFin Salary
薪水与大多数投资银行演出相媲美,全力以赴万博app网页版$130k。
"At the junior levels, it is comparable at most investment banks. If LF is not core to a bank (i.e. Houlihan which is more advisory than debt financing) then it may be lower since the group is not as profitable (or at all). In a good market, LF is one of the more sought-after groups because of its ability to provide staple financings which is helpful in winning sell-side mandates. It can be profitable as any other banking vertical later down the career path depending on the fees brought in which is dependent on the type of credit market."
Daily Work
Analysts mainly do a combination of credit analysis, modeling, and other miscellaneous things. Here's a nice summary of what they do from @ginNtonic".
Analysts structure leveraged loans / high yield bond deals for corporate and private equity firm transactions, such asM&A,LBOs, div recaps, etc. Analysts will write approval memos, offering materials, talk to institutional/bank investors, and model transactions.
Thing is, there's a lot of variation in the above functions depending on the firm. Some groups do plenty of modeling; some do a little; some do none. Some groups don't let their analysts talk to investors; most do.
Exit Opportunities
LF为您带来很好的三个出口机会是:
- Hedge funds
- Private equity
- Mezzanine funds
For hedge funds and private equity as an exit opp from LF, your chances depend greatly on the firm you work for. See the list above under "Leveraged Finance Investment Banks" for an idea of what firms are the best to work at in terms of exit opportunity and prestige.
For mezzanine funds, their work consists primarily of working with leveraged buyouts, meeting specific needs of investors, having unsecured debt with fewcovenants, and dealing with private transactions. All of these are similar if not the same as to the type of work done in a leveraged finance division of a bank, making those programs great feeders to mezzanine funds.
Besides the above three exit opportunities, there are always the typical investment banking exit opps: entrepreneurship, grad school, and all sorts of roles within a corporation.
Should I Work in LevFin?
How does Leverage Finance groups compare to the other investment banking groups? For career opportunities, here's how it stacks up against other groups from @1styearBanker".
From a general approach, LF with good experience will be just as good, if not better thanM&A, but analysts from both groups depend heavily on deal flow and their experiences.
尽管M&A在许多情况下,在许多情况下,LF小组的最佳投资银万博app网页版行集团将蛋糕付诸实践,而在其他情况下则更好。如果您与我们之前提到的任何顶级公司获得报价,那么您将为自己准备一些不错的退出机会。
Internship Preparation Before Working in a LevFin Group
Secured a summer internship in LF and looking to get prepared? Fret not! Here's three tips for you.
- Brush up on your modeling skills. It always helps to be familiar withIBOmodels although the extent to which you will model will largely depend on your team culture / bank. (As mentioned countless times, some teams do more modeling than others.)
- I would also not forget to work on your PowerPoint skills. Although you do significantly less PowerPoint than in industry coverage teams, it still helps to be efficient at this level.
- Understand the differences between leveraged loans and high yield bonds, the processes, the technicalities, etc. This is probably the most important, as being able to understand the technical aspects can really make you stand out.
要注意的一件事是,您可能会很少进行建模,因此如果这不是您的强壮西装,请不要担心太多。然而,二和三的提示是金色的。您应该绝对掌握PowerPoint,并了解三个中提到的术语。
Everything You Need To Master LBO Modeling
To Help you Thrive in the Most Prestigious Jobs on Wall Street.
Interested in Investment Banking - Breaking Into LevFin?
The fact of the matter is you won't improve unless you practice. To have any chance at the technical questions, you need to prepare yourself with legitimate questions. The2018世界杯狗万滚球app 是由无数专业人士设计真正的world experience, tailored to help you break into investment banking by acing the technical questions.
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