Raising capital: equity and debt markets
By the end of this lecture you will be able to
- Describe the IPO process, bookbuilding, pricing and the IPO discount, the greenshoe and the lock-up
- Compare follow-ons, accelerated bookbuilds, placements and rights issues, and compute a theoretical ex-rights price
- Explain how a convertible bond works, how it is accounted for and how it enters enterprise value
- Compare investment-grade bonds, high-yield bonds and leveraged loans: ratings, pricing over the benchmark and covenants
- Explain how mining companies raise money: placements, streams and royalties, and project finance sized on DSCR
- Explain seniority in a restructuring and how a company chooses between debt and equity
Companies need money to grow, to buy, or sometimes to survive. Investment banks raise it in two markets, equity and debt, and each has its own products, prices and rules. Today we tour both: how a company lists its shares, how it sells more later, how bonds and loans are priced and protected, how a mining company funds a mine, and what happens when a borrower cannot pay.
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