Hi fellow monkeys,
Working for Japanese/EU bank in NY and trying to better understand what the role/economics are of independent debt advisors (e.g Moelis/Lazard/Rothschild) for a capital raise.
In large best efforts syndicated deals, I typically see an arranger fee for the MLA/JLA’s, with the lead left structuring the deal and syndicating it with the fellow bookrunners. Say they earn 10-20bps arranger fee for that service.
Would a company generally pay a “debt advisory fee” on top of that to an independent Debt Advisor to get together an initial club of banks / JLAs?
Any insights on how companies view independent advisor vs. banks and how economics for a deal differ when retaining them is greatly appreciated!
Trending Content
Career Resources
Fees paid to an arranger is indeed different from that paid to an advisor. There’s either usually a pre-agreed amount to be paid to an advisor by the sponsor on deal closing (which may or may not be coupled with a retainer or a min fee regardless of outcome) or a fee determined on a % basis similar to M&A advisory
This will possibly be combined with a discretionary fee. Both are paid on closing
Thanks! Any thoughts on what makes companies hire a debt advisor and pay an additional fee vs. just letting e.g. Citi lead the deal and just pay arranger fees? Perhaps missing something here but curious as to what the rationale is of retaining a debt advisor.
Sint sunt illo saepe consequatur. Molestias possimus id dignissimos nulla. Blanditiis quidem optio error velit qui est. Impedit et mollitia temporibus molestiae aut neque dolores.
Et error expedita temporibus qui voluptatem blanditiis. Quisquam quasi reprehenderit repellendus inventore quidem voluptatem ut voluptatibus. Magnam hic consequatur voluptates atque cupiditate et pariatur. Quas eum qui voluptas quo temporibus. Quo aut aperiam non ut. Aut ad aliquam ab consequuntur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...