ratter Says
how are debt funds raised ( are these loans by banks) and you had a direct client facing role????
Debt (senior secured debt) is raised in the form of loans and bonds. The loans may be of three types - Short-term (working capital or bridge facilities, usually), term loans (3 years+) and lines of credit. Alternatively, you may have Non-fund based facilities also present. Depending on the clients requirement and associated pricing appetite, we would structure the client's requirements in sync with his drawdowns (when he would draw the money) to give the client the best deal. Part of this includes building in 'covenants' into the structure of the project depending on what the client is willing to offer and what the market demands. This super simplistic view is a part of what we call 'structuring'.
The next phase would be execution: In this phase, we prepare marketing materials - pitch books, slides, research collations, etc to be able to take the company to market. In India, the major lenders for debt are banks and FIs. However, since FIs have a higher all-in cost of funds, the smart banker usually gives them a miss. With banks, the story is unique to India. Indian banks are PSUs - and with all PSUs, you see inefficiency (except SBI - those guys are awesome!), inefficiency, endless tea-drinking, laziness and more inefficiency. I am not saying that everyone there is inefficient. I am just saying that the number of hard-working people I have met there, I could count on my fingers. So we need to know where the file is within the approval process within the banks - and who is looking at what papers and who is on vacation and who requires to be pushed into making a decision and where. The intricacies involved in 'pushing' files thru a PSU would be enough to make anyones head spin.
The third phase: documentation - We supervise the drawing up of legal documents (by independent legal counsel for the client) and proof read these documents to make sure that the lawyers haven't messed up the terms. One thing that lawyers have no clue about are the financials, and it is very common to see them mess up big time when it comes to putting down the covenants.
The fourth phase: First disbursement (this is sometimes a freebie if we really like the client) - we help the client understand how to get compliant with the rules required to draw their first tranche of money from the bank.
This is an oversimplification of the actual process which can consist of anywhere from 6 to ten phases depending on how the equity must come in to environmental compliances, etc. However, hopefully, this answers your question about debt fund raises.
To answer your second question, once again, all my assignments have been directly client and investor facing. In the team, each of us had relationships with individual investors and it would be impossible to syndicate our product to the investor if we had no interactions with the client. So yes - all my roles have been client facing.
FMS is a fantastic school but all schools are prone to BS-ing their placements (including mine, lol)
