Let's Talk Capital Markets

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JHP

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Let's Talk Capital Markets

Postby JHP » Wed Apr 17, 2019 11:27 am

I'm in big law, making a foray into capital markets work (not technically slotted into that group yet--still straddling doing M&A work with other ongoing public company stuff plus whatever capital markets stuff comes up for clients).

I'm interested in securities work generally, and am finding the capital markets to be more or less interesting, but haven't done enough to really get a sense of why people choose the work, up/downsides of that kind of work, how it sets folks up for potential exit options if they should so choose, the general health of cap markets groups and whether cap markets work is especially sensitive to market fluctuations (I would assume it is very sensitive to market dips).

Could folks share insights on the above points, as well as any relevant observations about cap markets work in your region, LA, NYC and Boston in particular?

TIA!

TUwave

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Re: Let's Talk Capital Markets

Postby TUwave » Wed Apr 17, 2019 11:52 am

Also interested as I'm a junior corporate "generalist" in a large east coast city (not NYC) but have been about a 50/50 split between M&A and Capital Markets (which would still include a little M&A and ongoing public work.) I'll have to choose a group shortly and any of the requested info would be helpful.

JHP

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Re: Let's Talk Capital Markets

Postby JHP » Tue Sep 10, 2019 1:32 pm

Bumping/reviving this thread. Hoping some folks can chime in now that some of the OCI forums have quieted down.

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Blessedassurance

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Re: Let's Talk Capital Markets

Postby Blessedassurance » Wed Sep 11, 2019 10:28 pm

What do you want to know specifically about securities/capital markets work?

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Re: Let's Talk Capital Markets

Postby Anonymous User » Thu Sep 12, 2019 1:13 pm

Blessedassurance wrote:What do you want to know specifically about securities/capital markets work?


I'm about to start as a 1st year in the cap markets group at my firm. I was hired during 3L so i'm nervous about the kind of work i'll be doing. Can you talk a little about what work you did as a 1st year and up?

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Re: Let's Talk Capital Markets

Postby Anonymous User » Sat Sep 14, 2019 1:35 pm

Capital markets work at biglaw comes in many different flavors/permutations. All the big firms pretty much do everything: equity, debt, convertible debt, etc., representing both issuers and underwriters depending on the deal. But most firms will also generally have a focus (e.g., representing mostly the underwriters on bond offerings). I think Simpson, Skadden and Cleary (non-exhaustive list) are the firms that come to mind that truly have a more balanced practice in terms of which side you're representing.

It's a repetitive practice. A lot of the practice is just copying and pasting, and there isn't much room for creative thought. The "creativity" in drafting disclosure mostly amounts to searching for 5-10 filings in the same industry/space by other companies and then copying and pasting that in to your current deal and tweaking it. Capital markets work in the context of restructuring can offer more unique issues that require creativity, but doing the securities side of restructuring work comes with its own basket of misery (insane timeline, constant fire drill, etc.)

As a first-year associate, you should expect to get familiar with the backup process and the auditor comfort letter process. Any non-obvious statement about the company's operations/business in an offering memorandum or filing has to be "backed up" by a source. This is similar to cite-checking that you've done for your journal at school. This "backup" source can be virtually anything from articles, third-party reports, internal company data, etc. Comforting process refers to any financial figures about a company. Such financial figures undergo a similar "backup" process, except that the auditors will do this for you. The most common issue you will encounter with the above is that auditors won't comfort certain things, and you will have to go back and forth with them to get them to comfort. If the auditors refuse to comfort, then you will have to go to the company to have them provide a "backup" for that certain figure.

You should also expect to do some type of form check. This means reading through the SEC rules to determine what information is required for a filing a certain form, and ensuring that the filing you're working on is compliant with those requirements.

You will likely do some due diligence as well, but it's not like M&A where you're sifting through a cavernous, never-ending data room. Most of the diligence you do in a Capital Markets practice tends to be "red-flag" diligence where you're looking for material issues at a high level. It doesn't get as granular as M&A diligence and you're typically not expected to draft a diligence report of any kind.

There are more wrinkles to the practice as you get more senior, but I think the above are the general tasks you should expect to handle as a 1st year. It's usually more "chill" than M&A, but that really depends on what deal. Doing securities work for acquisition finance or restructuring or high-yield offering is most definitely not chill.



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