Investment Banking Division

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Investment Banking Division

• 2006

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Abelmann Bank Divisions
Fixed Income, Currency and Commodities Division
Global Investment Research Division
Equities Division
Investment Banking Division
Human Capital Management Division
Management Committee
Executive Office
Merchant Banking Division
Legal, Compliance and Management Controls Division
Investment Management Division
Operations, Technology and Finance Division
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Investment Banking Mission Statement

• Abelmann Banks Investment Banking Division
  identifies, structures and executes diverse and
  innovative public and private market transactions
  for corporations, financial institutions and
  governments.

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Investment Banking Organizational Structure
Investment Banking Division
Investment Banking
Equity CapitalMarkets
Investment GradeCapital Markets
Leveraged Finance
Municipal Finance
New Products
Derivatives

• Consumer / Retail
• Financial Institutions
• Financial Sponsors Group
• Healthcare
• Industrials
• Latin America
• Natural Resources
• Real Estate
• Telecom, Media Technology

• Common Stock
• Convertibles
• Private Placements

• Emerging Markets
• Financial Institutions / FIG Structured Finance
• Investment Grade
• Liability Management

• Bank Loan Capital Markets
• Commodity Finance
• High Yield Capital Markets
• Leveraged Finance
• Liability Management
• Restructuring / Distressed Finance

• Corporate Related
• Energy and Public Power
• Healthcare and Higher Education
• Housing
• Infrastructure
• Public / Private Partnerships

• Equity Derivatives
• Municipal Derivatives
• Swaps Marketing

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Examples of How We Assist Clients
Mergers and Acquisitions
Financings
General Financial Advisory
Capital Structure Anti Raid Dividend
Policy Ownership Configuration Bankruptcy
Restructuring Business Strategy
Initial Public Offerings Follow-On
Offerings Spin-Offs / Split-Offs Private
Placements Bond Issuances Bank Loans Hybrid
Loans Convertibles Recapitalizations Derivatives

• Acquisitions
• Sales / Divestitures
• Mergers
• Leveraged Buy-Outs

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Investment Banking DivisionThe Job Experience
Phases Planning Investigation
assessment Preparation Marketing the
company Determining value Completion
Financing
Mergers Acquisitions
Equity Issuance Review capital requirements Due
diligence, developing the storyPreliminary
valuation Drafting the prospectusRoadshow
preparation Investor targetingRoadshow Indicative
ordersBuilding the order book PricingClosing
Sale of a Business Review of owners
objectives Business due diligencePreliminary
valuation Writing the selling memoPrepare mgmt
presentation Buyer contactsBuyer
visits Preliminary bidsFormal bids,
negotiationsFairness opinion Merger
agreementClosing
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Mergers Acquisitions
Mergers and Acquisitions (MA) - The combining
of two or more companies, generally by offering
the stockholders of one company securities in the
acquiring company in exchange for the surrender
of their stock.

• Buyer Strategic Rational
• Macroeconomic trends
• Enhancement of business model
• Expansion of scale of operations
• Revenue and cost synergies

• Seller Strategic Rational
• Realignment of strategic focus
• Defensive move for long term survival
• Monetization of value

Does it make Financial Sense? What is the Optimal
Transaction Structure? Post-Merger Considerations?
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What Is Our Role in an MA Transaction?
Preparation
Transaction
Design
Negotiation
Approvals/
Phase
Initiation
Phase
Phase
Closing
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Leveraged Buyout (LBO)
Leveraged Buyout (LBO) - The acquisition of a
business utilizing both debt and equity financing
sources, with the debt component representing the
more significant amount. The equity component is
often contributed from a financial sponsor or
private equity firm with the debt component
raised in the bank loan and / or high yield
financing markets.

• Use little equity and borrowed funds (leverage)
  to buy asset
• Pay down debt over time
• All excess returns accrue to the equity

100
100
Today
5 years later
IRR 25
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What Is Capital Markets?
Capital Markets seeks to balance the interests of
investors and issuers to achieve successful
offerings
Buyers/Investors
Alliance Capital Fidelity Janus PIMCO Putnam
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Financing Initial Public Offering (IPO)
IPO (Initial Public Offering) - Transfers a
portion of a companys ownership from a few
private stakeholders to many public shareholders

• Strategic Advantages
• New Capital
• Future Capital
• Liquidity
• Cashing Out
• Employee Compensation

• Strategic Disadvantages
• Profit-sharing/Loss of Control
• Loss of Confidentiality
• Reporting and Fiduciary Responsibilities
• IPO Expenses
• Legal Liability

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What Is Our Role in an IPO?
Solicitation
Internal Approval
Due Diligence
Preliminary Filing
Structuring
Roadshow Preparation
Roadshow / Marketing
Pricing and Offering
Aftermarket Trading
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The Investment Grade Bond New Issue ProcessA
Multi-Pronged Approach
Morning Market Update Call with Client to Decide
Go or No-Go
Announce Deal to the Market
Hold Investor Conference Call(If Necessary)
Price Transaction and Cross Treasuries with
Investors
Release Price Talk and Confirm Orders
A High Yield Offering follows a similar process
although after the deal is announced there is
typically a multi-day roadshow to market to
investors
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Municipal Finance

• With a target market of over 400 billion in bond
  financings per year, the Municipal Finance group
  serves U.S. based state and local governments,
  not-for-profit institutions, universities and
  corporate issuers
• The Department operates under a three-pronged
  integrated approach, focused on regional
  coverage, sector expertise, and product
  applicability
• In addition to the traditional governmental
  business, a substantial presence exists in
• -Public/Private Partnerships (Asset Sales)
• -Stadium Finance
• -Privatizations (Military Housing as example)
• -Project Finance
• We staff our efforts from offices in New York
  City, San Francisco, Los Angeles, Seattle,
  Portland, Chicago and Houston
• Analysts help manage complex transactions,
  thereby developing financial modeling, client
  relationship and new business generation skills
• Strong Municipal Finance candidates typically
  have a demonstrated interest in finance, strong
  quantitative and writing skills and a love of
  politics

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Role of an Investment Banker
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Roles Responsibilities
Managing Director
Vice President
Associate
Analyst
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The Role of an Analyst Day to Day Tasks

• Internal Meetings
• Client Meetings
• Financial Modeling
• Competitive/Market Analysis
• Due Diligence
• Presentation Books
• Memorandums / Proposals
• Marketing Materials
• Road Shows

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A Typical Day in the Life of a Banker

• 900am-930am Arrive into work, check voicemails
  and meet with Team A Associate
• 930am-1115am Submit Team A book to WP, finish
  Team A model, review model w/ Associate
• 1115am-1200pm Put together PIB, check WPs
  edits print 5 books for 1200pm meeting
• 1200pm-1245pm Meeting with Managing Director
  to discuss client book
• 1245pm-130pm Conference call w/ Assoc. and
  Vice President process comments and submit to WP
  
• 130pm-300pm Grab lunch, work on CSC, email
  Team A book to client for 300 meeting
• 300-430pm Client meeting via conference call
• 430pm-800pm Draft book for Team B, Meet with
  Team A Assoc. from Team A
• 800pm-1100pm Conference call with Team A VP,
  revamp analysis per VPs comments
• 1100pm-1230am Discuss analysis w/ Team A
  Assoc., finalize analysis and send to VP
• 1230am-230am Work on Team B analysis, check WP
  edits

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A Day in the Life . . . No Day is the
Same!Capital Markets
Early Morning 700am 930am
Mid-Morning 930am 1200pm

• Arrive between 700 and 730am. Breakfast!
• CCM Attend IG/HY morning meetings to get update
  on current business activity, new issue calendar,
  trading activity
• ECM Listen to morning call updates on current
  business activity, research comments and ECM deal
  updates
• Read news and sports headlines, check Treasury
  levels, Futures and economic releases for the day

• Make out-going calls to clients, update them on
  market activity and discuss their current
  financing plans
• CCM Due diligence call for bond deal. Talk with
  syndicate desk to get updated pricing for
  potential acquisition financing
• ECM Confirm roadshow schedules / begin gathering
  feedback. Attend block trade meeting to discuss
  upcoming trade
• Draft executive summary for upcoming pitch

Evening 5pm to ??
Afternoon 1200pm 500pm

• The real work begins!
• Continue working on client presentations
• Go to gym and grab dinner

• Attend meeting with banking team to review
  presentation for meeting later in the week
• CCM Post clients via email/calls on Bernanke
  testimony and Treasury market reaction. Finalize
  term sheet for leveraged loan financing pitch.
  Work with Liability Management desk on
  tender/refinancing analysis
• ECM Continue calls to salesforce to further
  flush out valuation feedback. Work with traders
  to come up with bid for block trade after the
  close. Work with sales / sales traders on
  allocations for transaction that is pricing

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Why Investment Banking?

• Solving Clients Most Important Strategic and
  Financial Issues
• Exposure to Top-Level Decision Making/Senior
  Client Exposure
• Fast-Paced Environment With Immediate Tangible
  Results
• Ability to Make an Impact Early in Ones Career
• Dynamic/Diverse Colleagues
• Solid Business Foundation for Future Endeavors
• Work Hard/Play Hard

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What We Look For
We look for well-rounded candidates who have
excelled in three main categories

• Academics
• Grades
• Not Just Econ Majors
• Test Scores
• Extracurriculars
• Leadership
• Initiative
• Energy Level
• Job Experience
• Responsibilities
• Purpose
• What Did You Learn

• Personal Characteristics
• Mature
• Team Oriented
• Self Motivated
• Detail Oriented
• Analytical
• Passion

• Questions we ask ourselves
• Is this person a good fit for Abelmann Bank?
• Is Abelmann Bank the right environment for this
  person?
• Will this person grow and thrive at Abelmann
  Bank?