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What are pricing and closing days like in capital markets?

Posted: Wed May 20, 2020 7:33 am
by Vassy Lien
Hi all,

I'm still trying to choose between capital markets and M&A (leaning M&A based on the answers to my last post, among other things) for my upcoming summer. I've been told that in capital markets the two big days for a bond deal (the type I hear is generating the most work now) are pricing and closing.

I've been googling info on what happens on each of these days (e.g., key documents and events, etc.), but haven't been able to find any. I'd appreciate it if someone could either share a link or share their experience. Thanks!

Re: What are pricing and closing days like in capital markets?

Posted: Wed May 20, 2020 8:38 am
by Anonymous User
as a junior, IME it just means you will be checking a lot of documents that come in (i.e. does this match the agreed form, are the exhibits and tickmarks right, etc.)

key documents would be the base indenture, supplemental indenture, comfort letter and etc., but those will have been agreed upon and finalized already (and all the substance there is largely handled by your midlevels and seniors anyways). you're just making sure no one is trying to pull a fast one and that no one fucked up.

there will be a diligence call, you will check the documents, let your client know that the agreed upon deliverables are in place and then the business people will do their thing.

it's not that interesting imo. first time is a rush, but future offerings will feel routine, besides waking up early depending on when the call is scheduled. you'll probably feel a sense of relief after closing though.

Re: What are pricing and closing days like in capital markets?

Posted: Wed May 20, 2020 10:40 am
by Idontwanttomakeaname
Depending on the timing of the deal, launch/pricing can be a shit show. If your deal is on a tight timeline, there can be a lot of balls up in the air that will be your responsibility (is the comfort letter in agreed form? do you have all of the fact backup? do we need more fact backup based on changes to the OM/pro supp? are there problems with the roadshow that you are seeing for the first time at 11pm the night before launch?) and that can result in very late, hectic nights. I am a junior so I can only speak to my experience but I've seen my seniors stay up all night negotiating substantive points the night before pricing. Generally speaking, this only happens on deals that are on unreasonable timelines (which in my experience has been a fair percentage of them) but ymmv depending on the type of work that your firm normally does.

Closing is usually not as bad (although T+2 is worse than T+10) since virtually everything of any importance is in agreed form by then but you can also be up late waiting for everything to come in the night before.

This is not to say that it is always like that but rather to offer a different perspective than the prior poster.

Re: What are pricing and closing days like in capital markets?

Posted: Thu May 21, 2020 6:08 am
by Vassy Lien
Thank you both. This is very helpful.