Introduction to Debt Capital Markets

BUILDING TOMORROW mental institution to Debt peachy Markets Craig Rydqvist rbs. com/gbm Introduction My background Finance firmament focussed culture and experience but not traditional IB route Education premiere degree BSc in Management Studies Postgraduate MSc Masters in Finance (part-time). operate on Experience KPMG Financial Sector Audit and Consulting (ACA) Barclays Capital Finance followed by Trading and Structuring RBS Finance followed by DCM Origination. actual case Director Conduit Origination Sell spatial relation origination, execution and structuring Buy side transaction epitome as RBS is ultimate risk taker Line animal trainer for Global Banking Analyst Programme. Mature version of Will from the Inbetweeners RBS00000 3 Xin Miao second Year Analyst, DCM Appears ge ared towards Investment banking didnt know what they were Education & Work Experience LSE BSc in Accounting & Finance RBS Easter internship (DCM) RBS Summer internship (FI DCM) Curr ent Role RBS Graduate programme First rotation Investment tick off corporate bond origination Second rotation (outside DCM) Energy & Resources sector RBS00000 4 RBS Investment Banking Model GBM GBM banking GBM marketplaces knobs Equities Origination corporeal DCM and Risk solutions kitty FI DCM / FISF Sector and Corporate Finance Client Management Trading gross sales Investors Corporate and FIG coverage Research and strategy Origination GBM trading operations Distribution RBS00000 5 DCM Products DCM Products are varied and lie on a spectrum between market facing and structured Corporate Investment pasture Bonds Financial Institution Debt High Yield Debt Liability Management loan Origination and Syndication Structured Finance Securitisation Covered Bonds FI Hybrids Structured Corporate Debt unavowed Placements Ratings Advisory RBS offers the complete package of DCM products RBS00000 6 What DCM Originators do Origination race Building Distribution Client pitche s Beauty parades Market Coverage helpmate Group Benchmarking Pricing Documentation Roadshows Investor contact Best deal for clientConstant colloquy with clients Pitching / responding to Requests for Proposal Indicative pricing and market commentary execution of instrument Development of a diverse skill-set Analysis of market trends (historical and current) Presentation skills baron to work across teams Day to day job Pricing analysis Continuous interaction with the market new contracts, market trends, demand drivers, rumours, etc Client presentations/meetings pitching for business Transaction facilitation including deal roadshows / investor due diligence RBS00000 7Current coalition Table Standings All Currencies WE IG Corporate Bonds 15 phratry 2011 YTD Bookrunner 1 Deutsche Bank 2 RBS 3 BNP Paribas 4 HSBC 5 JPMorgan integral industry cite Dealogic Analytics handle bar No. (%) (EURm) 9,277 52 10. 08 7,150 49 7. 77 6,294 39 6. 84 6,203 39 6. 74 5,951 26 6. 46 9 2,054 clxxx 100 2013 Target fructify Top 3 All Currencies WE Corp. & FI Syndicated Loans 15 September 2011 YTD Bookrunner ? 1 BNP Paribas SA 2 Credit Agricole CIB 3 Societe Generale 4 RBS 5 HSBC Holdings PLC Total constancy Source Thomson Reuters Share Amount No. %) (EURm) 19,092 one hundred thirty-five 7. 60 18,246 86 7. 20 16,003 93 6. 30 15,635 99 6. 20 13,443 78 5. 30 252,044 352 100 2013 Target Position Top 3 All Currencies CEEMEA Corp. Synd. Loans 15 September 2011 YTD Bookrunner ? ? ? 1 Citi 2 Credit Agricole CIB 3 RBS 4 BNP Paribas SA 5 Barclays Capital Total Industry Source Thomson Reuters Share Amount No. (%) (EURm) 3,217 27 9. 00 3,052 19 8. 60 2,561 15 7. 20 2,541 16 7. 10 1,961 6 13. 00 35,593 68 100 2013 Target Position Top 5 ? ? ? ? Cross Border Private Placements 15 September 2011 YTDBookrunner 1 RBS 2 BAS 3 Barclays 4 HSBC 5 CBA Total Industry Source PP Monitor Amount (EURm) 4,543 3,994 1,902 1,775 1,528 No. 22 19 12 9 7 Share (%) 23. 80 20. 90 9. 90 9. 3 0 8. 00 All Currencies WE HY Corporate Bonds 15 September 2011 YTD Bookrunner ? ? ? ? ? All Currencies CEEMEA Corporate Bonds 15 September 2011 YTD Bookrunner 1 Barclays Capital 2 RBS 3 Goldman Sachs 4 BNP Paribas 5 Citi Total Industry 2013 Target Position Top 3 1 Deutsche Bank 2 Goldman Sachs 3 Citi 4 Credit Suisse 9 RBS Total Industry Source Dealogic AnalyticsAmount Share No. (EURm) (%) 4,161 35 11. 11 3,518 23 9. 40 2,922 18 7. 80 2,909 20 7. 77 1,820 16 4. 86 37,441 88 100 2013 Target Position Top 5 Amount (EURm) 2,398 1,360 1,335 1,300 1,095 15,638 No. 13 9 8 9 6 37 Share (%) 15. 34 8. 70 8. 54 8. 31 7. 00 100 ? ? ? ? ? Source Dealogic Analytics 2013 Target Position Top 5 RBS is a market drawing card in all the major DCM products RBS00000 8 Major differences between DCM and . Corporate Finance Corporate Finance has lower execution volume As a result lots of time spent itching strategical ideas DCM is more transaction focussed DCM bankers have more honor for your occult life Markets Markets covers, sales, trading, research and other areas so its a littler hard to generalise Markets work more driven by market psychology and sort-term trends and relative value DCM generally more macro-economic focus so interaction is with the client C-suite Equity Capital Markets DCM bankers are pessimists, ECM bankers are optimists DCM involves more definite maths bond maths is less regretful RBS00000 9 Why major power I choose to work in DCM at RBS? If you are interested in how businesses work probably at a slightly more detailed level You like maths that works less need to speculate on growth evaluate and uncontrollable factors DCM is the most successful franchise at heart RBS GBM and carries that kudos throughout the organisation The DCM analyst programme offers lots of variety with a negligible of 6 rotations, of which at least 4 will be within DCM If you still want to learn we take analyst development in truth seriously If you want to work with great people DCM bankers have respect for your private life DCM is a great place to learn and developRBS00000 10 Life of a DCM analyst Fast-learner Creative and innovative thinker precaution to detail Work well under pressure 7. 30-8. 30am start unremarkable tasks Morning meetings Market updates/reports Other updates e. g. comp each pricing Building models, producing presentations collaborationism talking to traders, syndicate desks, Relationship Managers, other teams in DCM Analysts events training, networking lunch substantiative Attitude RBS00000 11 Pop Quiz Should these client queries be tell to DCM, ECM, Corporate Finance, Markets or somewhere else? accompany CFO interested in divesting a non-core division Institutional investor seeking to take risk on Greek sovereign default Company CFO seeking to rectify a syndicated loan facility Bank of England seeking information on RBS exposure to Italian FIs Company CFO seeking to understand the usurpat ion on his company credit rating of redeeming outstanding bonds Company CFO seeking advice on complete capital restructure same(p) CFO following up to understand how much capital she might trounce via a rights issue and the effects of such a rights issue Institutional investor seeking to attend a roadshow for an upcoming securitisation deal very(prenominal) investor seeking to switch his exposure in mortgage securitisation to exposure in auto securitisation CFO of the same investment company seeking to raise capital in the private placement market. Collaboration is Key we function clients best when we leverage the breadth of our franchise RBS00000 12 Questions? RBS00000 13This strong is issued by The empurpled Bank of Scotland plc (RBS) and is intended to provide the recipient (the pass catcher) with a summary of potential transaction structures and terms and conditions that may or may not lead to transactions being entered into between RBS and the Recipient. Unless and unt il both RBS and the Recipient agree to, and sign formal written contracts, it is not intended that each RBS or the Recipient is, or will be, bound by any of these proposed terms and conditions. This material is confidential and is intended for aim only by the Recipient and its professional advisers and remains the property of RBS. 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