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Capital Markets 101 Dr. Judson Russell, CFA. What is Capital Markets?. Helping Companies Finance their Strategic Plans. Noah Holdings Ltd. US$5,732,444,283 Capital Increase Joint Bookrunner & Global Coorindator Apr 2010 Germany. US$13,961,810,315 Rights Issue Joint Bookrunner

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helping companies finance their strategic plans
Helping Companies Finance their Strategic Plans

Noah Holdings Ltd

US$5,732,444,283Capital Increase

Joint Bookrunner & Global Coorindator

Apr 2010

Germany

US$13,961,810,315 Rights Issue

Joint Bookrunner

Oct 2010 Germany

US$2,239,469,809IPO

Joint Bookrunner

Jan 2010 Russia

US$500mm

Reg SSubordinated LT2 Notes

Joint Bookrunner

US$116 mm

September 2010

US$70.0 billion

Follow-on

Global Coordinator

IPO

Joint Bookrunner

Joint Lead Manager

November 2010

Nov 19, 2010

US$5,000,000,000Multi-Tranche Fixed OfferingJoint Bookrunner October 2010

US$4,500,000,000Multi-Tranche Fixed Offering

Joint Bookrunner

November 2010

US$2,000,000,0005yr & 10yr Fixed Offering Joint Bookrunner November 2010

£5,000,000,00030yr Fixed Offering (Tap)

Joint Bookrunner

October 2010

June 2010

US$5.4 billion

Follow-on

Global Coordinator

May 2010

US$3.0 billion

Follow-on (PP)

Global Coordinator

Republic of Peru

C$500,000,000Fixed OfferingJoint BookrunnerSeptember 2010

US$2,000,000,0005yr Fixed Offering

Joint Bookrunner November 2010

US$1,000,000,00040yr Global Notes

Joint Bookrunner

November 2010

US$2,500,000,000

Senior Unsecured Notes

Joint Lead Manager & Bookrunner

November 2010

$2,000,000,0005yr Covered Bond Fixed OfferingJoint Bookrunner

October 2010

March 2010

US$715 million Convertible

Joint Bookrunner

the big picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

The Big Picture

Investors

the big picture1

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

The Big Picture

Investors

slide6

The Big Picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

Investors

slide7

The Big Picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

Investors

slide8

The Big Picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

Investors

slide9

The Big Picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

Investors

slide10

The Big Picture

Issuers

Equity Capital Markets

Information Wall

Corporate & Investment Banking Coverage

Equity Research

Debt Capital Markets

Syndicate

Sales and Trading

Fixed Income Research

Investors

how are capital markets organized
How are Capital Markets Organized?

Equity Capital Markets

Debt Capital Markets

  • IPO
  • Follow-On
  • Equity-Linked
  • Investment Grade Bond
  • High Yield Bond
  • Senior Bank Debt
  • Leveraged Finance
slide12

What Does Equity Capital Markets Do?

Client

(Equity Issuer)

Equity Research

Investment Banking

Sales

Equity Capital Markets

Trading

Institutional Investors

slide13

What Does Equity Capital Markets Do?

Client

(Equity Issuer)

Equity Research

Investment Banking

Sales

Equity Capital Markets

Institutional Investors

Trading

slide14

What Does Equity Capital Markets Do?

Client

(Equity Issuer)

Equity Research

Investment Banking

  • The client’s main relationship
  • Advises client on business strategies and alternatives
  • Introduces client with product groups as appropriate
  • Role in an Equity Offering
  • Completes due diligence
  • Assists in document drafting
  • Drives internal discussions on valuation and timing

Sales

Equity Capital Markets

Institutional Investors

Trading

slide15

What Does Equity Capital Markets Do?

Client

(Equity Issuer)

Equity Research

Investment Banking

  • The client’s main relationship within BofAML
  • Advises client on business strategies and alternatives
  • Introduces client with product groups as appropriate
  • Role in an Equity Offering
  • Completes due diligence
  • Assists in document drafting
  • Drives internal discussions on valuation and timing

Sales

Equity Capital Markets

  • Works with industry bankers to advise clients on raising equity capital
  • Monitor the equity markets
  • Role in an Equity Offering
  • Coordinates all internal efforts between banking, sales and research (when permitted)
  • Roadshow scheduling and logistics
  • Maintains order book and compiles investor feedback
  • Recommends offer price to client; allocates shares to investors

Institutional Investors

Trading

slide16

What Does Equity Capital Markets Do?

  • Role in an Equity Offering
  • Analysts educate the sales force and investors on the key points of the transaction (business, valuation, growth drivers, positives, risks, etc.)
  • Receives and makes outgoing calls regarding the transaction

Client

(Equity Issuer)

Equity Research

Investment Banking

  • The client’s main relationship within BofAML
  • Advises client on business strategies and alternatives
  • Introduces client with product groups as appropriate
  • Role in an Equity Offering
  • Completes due diligence
  • Assists in document drafting
  • Drives internal discussions on valuation and timing

Sales

  • Has relationships with the buy-side
  • Continually relays research analyst recommendations and viewpoints to institutional investors
  • Role in an Equity Offering
  • Attends “teach-ins” from the research analyst and the client on the company’s story
  • Educates the buy-side on the merits of the transactions
  • Relays to ECM buy-side interest in one-on-one and small-group meetings
  • Relays orders to ECM and confirms deal allocations with investors

Equity Capital Markets

  • Works with industry bankers to advise clients on raising equity capital
  • Monitor the equity markets
  • Role in an Equity Offering
  • Coordinates all internal efforts between banking, sales and research (when permitted)
  • Roadshow scheduling and logistics
  • Maintains order book and compiles investor feedback
  • Recommends offer price to client; allocates shares to investors

Institutional Investors

Trading

  • Market maker in the client’s stock (if public)
  • Role in an Equity Offering
  • Provides liquidity to investors post-offering
  • Stabilizes stock if it comes under pressure after an offering
slide17

What Does Equity Capital Markets Do?

  • Role in an Equity Offering
  • Analysts educate the sales force and investors on the key points of the transaction (business, valuation, growth drivers, positives, risks, etc.)
  • Receives and makes outgoing calls regarding the transaction

Client

(Equity Issuer)

Equity Research

Investment Banking

  • The client’s main relationship within BofAML
  • Advises client on business strategies and alternatives
  • Introduces client with product groups as appropriate
  • Role in an Equity Offering
  • Completes due diligence
  • Assists in document drafting
  • Drives internal discussions on valuation and timing

Sales

  • Has relationships with the buy-side
  • Continually relays research analyst recommendations and viewpoints to institutional investors
  • Role in an Equity Offering
  • Attends “teach-ins” from the research analyst and the client on the company’s story
  • Educates the buy-side on the merits of the transactions
  • Relays to ECM buy-side interest in one-on-one and small-group meetings
  • Relays orders to ECM and confirms deal allocations with investors

Equity Capital Markets

  • Works with industry bankers to advise clients on raising equity capital
  • Monitor the equity markets
  • Role in an Equity Offering
  • Coordinates all internal efforts between banking, sales and research (when permitted)
  • Roadshow scheduling and logistics
  • Maintains order book and compiles investor feedback
  • Recommends offer price to client; allocates shares to investors

Institutional Investors

Trading

  • Market maker in the client’s stock (if public)
  • Role in an Equity Offering
  • Provides liquidity to investors post-offering
  • Stabilizes stock if it comes under pressure after an offering
what does debt capital markets do
What Does Debt Capital Markets Do?

Government Trading

Capital Markets Desk

Issuers

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

what does debt capital markets do1
What Does Debt Capital Markets Do?

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

what does debt capital markets do2
What Does Debt Capital Markets Do?

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
what does debt capital markets do3
What Does Debt Capital Markets Do?

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions
what does debt capital markets do4
What Does Debt Capital Markets Do?
  • Traders, Exchangers and Consents
  • Capital and Liability Structure

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions
what does debt capital markets do5
What Does Debt Capital Markets Do?
  • Traders, Exchangers and Consents
  • Capital and Liability Structure

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Generate Market Information

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions
what does debt capital markets do6
What Does Debt Capital Markets Do?
  • Traders, Exchangers and Consents
  • Capital and Liability Structure

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Generate Market Information

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

New Issue Feedback

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions
  • New Issue Pricing
  • Transaction Feedback
  • General Market Information
what does debt capital markets do7
What Does Debt Capital Markets Do?
  • Traders, Exchangers and Consents
  • Capital and Liability Structure

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Generate Market Information

Liability Management

Fixed- Income Sales Force

Corporate Trading

Sector Research and Economists

Risk Solutions

Syndicate

  • Secondary Trading Levels
  • General information

New Issue Feedback

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Secondary Trading Levels
  • General Market Information

Secondary Trading Bids/ Offers

  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions
  • New Issue Pricing
  • Transaction Feedback
  • General Market Information
what does debt capital markets do8
What Does Debt Capital Markets Do?
  • Traders, Exchangers and Consents
  • Capital and Liability Structure

Government Trading

Capital Markets Desk

Issuers

Debt Origination

- Market Information

- Financing Ideas

- Opportunities

Generate Market Information

Liability Management

Corporate Trading

Fixed- Income Sales Force

Sector Research and Economists

Risk Solutions

Syndicate

  • Secondary Trading Levels
  • General information

New Issue Feedback

Investor Feedback

  • Swap and Derivative Pricing
  • Trading Axes
  • Swap-Driven Financing Opportunities
  • Secondary Trading Levels
  • General Market Information

Secondary Trading Bids/ Offers

  • Market Forecasts/ Outlooks
  • Interest Rate Outlook
  • Credit Fundamentals
  • Investor Perceptions

Investor Feedback

  • New Issue Pricing
  • Transaction Feedback
  • General Market Information
roles and responsibilities2
Roles and Responsibilities

The information in this prospectus supplement and the accompanying prospectus is not complete and may be changed. This prospectus supplement and accompanying prospectus are not an offer to sell these securities and are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

roles and responsibilities3
Roles and Responsibilities

Joint Book runner

Lead Left Book runner

Sole Book runner

Sole Arranger

conclusion
Conclusion

Capital Markets links issuing clients with investor clients

Equity Capital Markets & Debt Capital Markets

Various roles of Capital Markets

How an Investment Bank gets paid