IB0123投资银行与评级 历年考题

January 14
16
Appointment of Transaction Parties (Cont’d)
> Issuer’s Legal Counsel: – Represents issuer’s interests. – Responsible for participating in due diligence, drafting the prospectus, identifying legal issues and producing publicity guidelines etc. > Underwriters’ Legal Counsel: – Represents underwriters’ interests. – Responsible for reviewing the due diligence materials, the prospectus and other legal documentation. – Responsible for drafting the underwriting agreements and research guidelines, and identifying legal/regulatory issues.
January 14
3
Corporate Finance
Role and Functions of Investment Banks
January 14
5
Equity Capital Market: Key Terms
> > > Initial Public Offering: A company (called the issuer) issues common stock or shares to the public for the first time. Follow-on Offering: Issuance of stock subsequent to the company's IPO. Primary vs. Secondary: – Primary: Offering of securities by the company (dilutive) – Secondary: Offering of securities by a shareholder of the company (nondilutive) > Convertible Bonds: Bonds that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreedupon price. Chinese Wall: Separation (including physical and email) between primary and secondary market divisions of an investment bank to restrict the flow of confidential information.
January 14
15
Appointment of Transaction Parties
> Lead Manager: – Coordinate all transaction parties. – Conduct due diligence and manage the entire deal execution process. – Liaise and communicate with the stock exchanges on key listing issues. – Market equity story to investors and make final pricing and allocation recommendations. – Manage aftermarket stabilisation and support. > Managers: – Provide support in sales and distribution of the issuer’s securities. – Research support to offer multiple banks’ views on the issuer. – Underwrite the issuer’s securities in the event of under-subscription.
January 14
9
Pitching (Cont’d)
> The strategy behind a winning pitch depends on a precise goal setting. As bankers engage in the precise goal setting process, the bankers’ pitch team needs to develop a unified view regarding the following: – Financial goals: What specific financial outcomes is the banker seeking from the IPO? – Transactional goals: Beyond the IPO itself, what type of future business relationship is the banker seeking to cultivate with the issuer? – Reputational goals: How will the banker’s role as the lead manager potentially leverage the bank’s reputation in the: > Industry; > Country; > Others?
>
The above supersedes the course outline in the January 16 lecture slides
January 14
2
Today’s Topics
> > > > > Corporate Finance Pitching Preparation Due Diligence, Listing Rules and Prospectus Appendix: Cinda AM
January 14
6
>
Pitching
IPO Candidates
> > > > > > > What is its management known for? What does the company do well? What is its track record? Does the company have a proven growth story? Has the company shown consistent profitability? Is its business model compelling? Is it an industry leader?
> > > > > Have a proven track record. Have integrity. Have a sound reputation with proven experience. Have a strong global network. Have a strong relationship with regulators and stock exchanges.
AF5368: Investment Banking & Credit Rating
Stan Ho Adjunct Professor, School of Accounting and Finance, PolyU January 23, 2014
Course Outline: Investment Banking
January 14
8
Pitching
> > The potential issuer sends out the request for proposal (RFP) to a select group of investment bankers. Pitch book, essentially the proposal, is prepared in response to the RFP and comprises the following: – The bank’s reputation in leading IPOs; – The performance of other IPOs or similar offerings managed by the bank; and – The prominence of the bank’s research analyst in the industry, which can tacitly guarantee that the new public stock will receive favorable coverage by a listened-to stock expert.
> > > > > > > Class 1 (Jan 16): Investment Banking Industry Overview Class 2 (Jan 23): Corporate Finance/IPO 1 Class 3 (Jan 30): Corporate Finance/IPO 2 Class 4 (Feb 13): Sales and Trading Class 5 (Feb 20): Private Equity 1 Class 7 (Feb 27): Mid-Term Test; CV/Finance Job Search Workshop Class 6 (Mar 6): Private Equity 2