400 IB questions

S-1 registration statement

describes the company’s business and markets it to investors.

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Debt insurance deal

1. Meet with the client and gather basic financial, industry, and customer

information.

2. Work closely with DCM / Leveraged Finance to develop a debt financing or LBO

model for the company and figure out what kind of leverage, coverage ratios,

and covenants might be appropriate.

3. Create an investor memorandum describing all of this.

4. Go out to potential debt investors and win commitments from them to finance

the deal.

The main differences vs. an IPO(Debt insurance deal)

there are fewer banks involved, and you don’t need SEC approval to do any of this because debt is not sold to the “general public” but rather to sophisticated institutional investors and funds.

Equity Capital Market

ECM

Debt Capital market

DCM

What’s the difference between DCM and Leveraged Finance?

They’re similar but Leveraged Finance is more “modeling-intensive” and does more of the deal execution with industry and M&A groups on LBOs and debt financings. DCM, by contrast, is more closely tied to the markets and tracks trends and relevant data.

what is a divestiture is

It’s when a company (public or private) decides to sell off a specific division rather than sell the entire company. The process is very similar to the sell-side M&A process above, but it tends to be “messier” because you’re dealing with a part of one company rather than the whole thing.