[konqueror_vivek]

Originally Posted by pendyal

not saying it means only writing loans and m&a but traditionally it was all abt raising money for businesses.....was just wondering why no one was discussing that aspect of the business here......

Correct me if I stand wrong, raising money means - issuing bonds / loans for operations - As we know the crises in the US, has not affected the relationship loans (one year revolving facilities, commercial paper programs), which I banks have with big institutions like, Johnson and Johnson, Cisco, Microsoft, eBay etc. -these are mostly unsecured senior facilities. However the secured facilities (mostly leveraged loans) have a collateral and once the money is raised - let it be loan / bond / notes / hybrids they are traded in secondary market and believe me it is a huge market. Citigroup, JPMorgan, Bank of America are among the biggies in leverage loan issuance - (JPM stands one in terms of number of deals, bankam stands one in terms of volume)

I banking dosent only mean raising money for operating business in a country, it has whole lot of other things, which involves selling the securities in secondary market. The LCDX in the US , iTraxx probably in Europe and Asia region are mature indices where loans are traded.

Cheers,

[pendyal]

Originally Posted by konqueror_vivek

Correct me if I stand wrong, raising money means - issuing bonds / loans for operations - As we know the crises in the US, has not affected the relationship loans (one year revolving facilities, commercial paper programs), which I banks have with big institutions like, Johnson and Johnson, Cisco, Microsoft, eBay etc. -these are mostly unsecured senior facilities. However the secured facilities (mostly leveraged loans) have a collateral and once the money is raised - let it be loan / bond / notes / hybrids they are traded in secondary market and believe me it is a huge market. Citigroup, JPMorgan, Bank of America are among the biggies in leverage loan issuance - (JPM stands one in terms of number of deals, bankam stands one in terms of volume)

I banking dosent only mean raising money for operating business in a country, it has whole lot of other things, which involves selling the securities in secondary market. The LCDX in the US , iTraxx probably in Europe and Asia region are mature indices where loans are traded.

Cheers,

well, as far as my understanding goes, raising money doesnt only mean thru bonds and loans.....it cud also be thru private placement as u had mentioned earlier (done i think mostly thru PE firms and these shares dont normally end up on the exchanges) and the unsecured loans that u r talking abt....thats not the business of i-banks,...i-banks dont lend out money to their clients (as far as i know here in india - but they do invest in the form of purchasing stock and shares)...that i think is the business of commercial banks...what i had in mind when i talked of the traditional role of investment banks was acting as a conduit between ppl who had surplus money to invest and ppl who needed this money in their operations (again from my limited knowledge of i-banking)....

never even kostined if trading cud be called i-banking

P.S.: had raised the original kostin because among all the drum-beating abt how the trading markets were being affected no one talked of the fund raising aspect and m&a aspect.....we r having more business than we can handle here at E&Y

[konqueror_vivek]

Originally Posted by pendyal

well, as far as my understanding goes, raising money doesnt only mean thru bonds and loans.....it cud also be thru private placement as u had mentioned earlier (done i think mostly thru PE firms and these shares dont normally end up on the exchanges)

I guess you got it wrong, privately placed securities dosent mean that the issuer dosent have the right to trade the securities - private placement has nothing to do with tradeability of any security ! These securities are traded on OTC markets. For the US, Bank of America has the biggest share by far in private placement.

and the unsecured loans that u r talking abt....thats not the business of i-banks,...i-banks dont lend out money to their clients (as far as i know here in india - but they do invest in the form of purchasing stock and shares)...that i think is the business of commercial banks...what i had in mind when i talked of the traditional role of investment banks was acting as a conduit between ppl who had surplus money to invest and ppl who needed this money in their operations (again from my limited knowledge of i-banking)....

Unsecured loans are "not" the business of I banks, I wonder how you would justify that, unsecured loans (read revolvers which holds the majority), are the backbone of commercial paper program for big investment grade firms in the US.

Investment banks do not issue cheques to firms, which is issued by the holding bank (for example - Banc of America NA, issues cheques on behalf of Banc of America Securites LLC, Citibank NA issues cheques on behalf of Citigroup LLC etc).

never even kostined if trading cud be called i-banking

P.S.: had raised the original kostin because among all the drum-beating abt how the trading markets were being affected no one talked of the fund raising aspect and m&a aspect.....we r having more business than we can handle here at E&Y

Ernst and Young probably has more buisness because the deals in pipeline are executed, and there has been drastic fall in new issuance.

[pendyal]

Originally Posted by konqueror_vivek

I guess you got it wrong, privately placed securities dosent mean that the issuer dosent have the right to trade the securities - private placement has nothing to do with tradeability of any security ! These securities are traded on OTC markets. For the US, Bank of America has the biggest share by far in private placement.



Unsecured loans are "not" the business of I banks, I wonder how you would justify that, unsecured loans (read revolvers which holds the majority), are the backbone of commercial paper program for big investment grade firms in the US.

Investment banks do not issue cheques to firms, which is issued by the holding bank (for example - Banc of America NA, issues cheques on behalf of Banc of America Securites LLC, Citibank NA issues cheques on behalf of Citigroup LLC etc).



Ernst and Young probably has more buisness because the deals in pipeline are executed, and there has been drastic fall in new issuance.

guess i have a lot to learn

[willsurelywin]

Greenspan admits many banks and instituions will be bailed out by fed

Former Federal Reserve chairman Alan Greenspan warns more banks may be bailed out | Business | guardian.co.uk


but who will bailout the FED

[fIrenzze]

Can anybody explain the concept of LLPs (limited liability partnerships) ? I have heard that the Indian parliament has not yet passed this act, but I am a bit confused as to how these private equity companies operate in India (since they are also LLPs) ?
Also, is there any differrence between LLP and LLC ?

p.s - pendyal sir, are you the same commerce guy who scored 100ptile in CAT 2-3 yrs back ?

[AMIT_007_001]

Originally Posted by fIrenzze

Can anybody explain the concept of LLPs (limited liability partnerships) ? I have heard that the Indian parliament has not yet passed this act, but I am a bit confused as to how these private equity companies operate in India (since they are also LLPs) ?
Also, is there any differrence between LLP and LLC ?

Limited Liability Partnership
Two or more partners united to conduct a business jointly, and in which one or more of the partners is liable only to the extent of the amount of money that partner has invested. Limited partners do not receive dividends, but enjoy direct access to the flow of income and expenses.

The main advantage to this structure is that the owners are generally not liable for the debts of the company.
:huh:

[konqueror_vivek]

Originally Posted by AMIT_007_001

Limited Liability Partnership
Two or more partners united to conduct a business jointly, and in which one or more of the partners is liable only to the extent of the amount of money that partner has invested. Limited partners do not receive dividends, but enjoy direct access to the flow of income and expenses.

The main advantage to this structure is that the owners are generally not liable for the debts of the company.
:huh:

Right, the owner is not liable for the debt of the (daughter) company, just to add, the I banking arms of these banks, do not have Legal "Bank" word, for example JPMorgan Chase Bank's - I Banking arm is JPMorgan Chase. These arms can only advice the national association / parent for deals / loan issuance, they themselves dont hold the authority to issue cheques to borrowers. Also in quarterly / annual league tables the credit is written for (for example) Bank of America NA and not for Banc of America Securities LLC.

[Tumtum]

Read this Reuters article folks and see how blatantly unscrupulous Ibanks can get if no one supervises them ! Let us also have discussions on such topics to make this thread more info-rich.



Citigroup has reached a multi billion-dollar settlement with regulators and governments on claims it improperly urged customers to buy a type of bond that fell apart in conjunction with the sub-prime mortgage crisis.
Citigroup will buy back from customers $7.5 billion worth of auction-rate securities - a type of bond the interest rate of which are set at periodic auctions, according to Thursday's settlement.
The Securities and Exchange Commission, New York's Attorney General Andrew Cuomo and others alleged Citigroup pushed the securities to customers as providing easy access to their invested cash, without much risk.
The system functioned as long as there were customers willing to buy the bonds. But the market for the bonds evaporated in February and the auctions failed after bond insurers that guaranteed the investments got caught up in the sub-prime mortgage crisis. Investors were left unable to sell the securities.
The settlement could set a precedent for other investment firms that sold such auction-rate securities, worth an estimated $200.
"Today's settlement sends a resounding message to the entire auction-rate securities industry. This type of deceptive behaviour will not be tolerated and we will actively seek justice on behalf of investors," Cuomo said in a statement.
"Our goal is simple: to get investors back their money, and that's exactly what this deal does."
In addition to buying back $7.5 billion in investments from about 40,000 individual investors, the firm will pay a $50 million fine to New York state and a $50 million fine to the North American Securities Administrators Association.
It must also develop a plan to liquidate $12 billion more of the same securities sold to institutional investors, like retirement plans.
Citigroup said in a statement that it has worked with investors to get cash for those who hold auction-rate securities they cannot sell.
"We are pleased to reach this agreement in principle with the New York attorney general, the Securities and Exchange Commission, and other state regulatory agencies," the company said. "We remain committed to continuing our work on initiatives that will secure the best and fastest route to providing liquidity to our clients."

[willsurelywin]

ubs will lose 20 billion dollars
UBS to settle securities case for $19.4B