Capital Markets vs Finance/Banking/Lending

[Idontwanttomakeaname]

Could someone explain to me how the actual day to day of a junior associate who works in capital markets differs from one who works in a non-securities lending practice (Finance/Banking/Lending depending on the firm)? As a law student, they seem functionally the same. I am aware that capital markets is more controlled by law (sec reg) while non-securities loans are creatures of contract but its not clear what if any difference this makes to someone working on these kinds of deals.

[ruski]

they are pretty different. on a junior lever, in capital markets you will be doing almost exclusively diligence and going back and forth with the printers to make sure everyone's comments are included. finance/lending there usually isn't much diligence and thus on a junior level there isn't much to do, but some tasks include keeping up with the closing checklist; drafting some of the ancillary documents (there are a bunch) and inputting comments.

my impression was that capital markets is more a disclosure exercise, where the issuer and underwriter are just trying to disclose everything about the issuer to avoid a lawsuit, and finance/lending is more a negotiation between the bank and borrower.

[v5junior]

way more ancillaries/signature pages to do in banking. i do not know that i would say that there's materially less to do as a junior in banking than cap markets. agree that they are very different though.

looking beyond the role of a junior, i think a big difference is how much you enjoy learning about different companies vs. substantively negotiating complex documents. much more of the former in cap markets, much more of the latter in banking.

also, unless you want to work at a bank (primarily in nyc), cap markets will have much broader exit ops.

[Anonymous User]

Did a finance rotation at V5. Didn't do cap markets but have friends who rotated/assigned there.

The biggest difference in my experience is that--especially as a junior--i didn't need to know anything about the borrower other than being familiar with their existing facilities and their collateral (e.g., where their IP is). Difference is particularly pronounced at our firm where our capital markets group handles the diligence calls for the finance group. In addition to the general corporate junior grunt work (e.g., tracking responses/signature pages), juniors are usually responsible for the exhibits and schedules and taking first crack at issues lists.

My cap markets friends spent a lot more time going through the Company's filings to understand/flag aspects of the Company's business. Much more of a disclosure practice at the junior level. Lots of closing checklist work in both. Cap markets a little more similar to M&A in that you can have a lot of juniors at the bottom and you have to wait longer to touch the real docs like indentures or offering memorandums. Finance teams tend to be leaner.

[RedGiant]

also, unless you want to work at a bank (primarily in nyc), cap markets will have much broader exit ops.

This is the very key thing you need to keep in mind. Exit opps from banking/lending/finance are much narrower.