Wall Street Banks Are Trying Everything in Fight to Win Underwriting Deals
- Banks are selectively pitching to provide junior financing
- Borrowers may increasingly use both banks and direct lenders
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Investment banks including Goldman Sachs Group Inc. and Barclays Plc are striving to get a lucrative fee-making machine back in action.
Traditional lenders are so keen to win leveraged buyout financing that some are pitching for subordinated debt deals — the riskiest type of underwriting which they mostly avoided during a bruising past few years. At least one bank is offering payment-in-kind options, which allow interest payments to be deferred, and others are talking to borrowers about so-called pre-capitalizations, which give companies financing before a deal has even gone on the block, according to people familiar with the matter.