Investment Banking Documents

Confidential Information Memorandum (CIM)

Overview

Confidential Information Memorandums are comprehensive company marketing documents that are created by sell-side investment banks to give prospective buyers of an overview of their client. CIM’s are utilized by private equity firms and corporate development departments when determining what to pay in a potential acquisition. CIM’s are confidential in nature because they contain sensitive information from the company’s management that is not available to the public. If you are an analyst in an M&A or industry group at a bulge bracket bank or an analyst at a M&A advisor, you will likely be writing a lot of CIM’s.

Example

Suppose that Mark Zuckerberg wants to sell Facebook, and he hires Morgan Stanley to manage the sale process. Morgan Stanley investment banking analysts would write the CIM in collaboration with Mark in order to give buyers a good idea of what Facebook might be worth. The CIM may have projections from Facebook’s management about how Facebook plans to invest for future growth or cut costs. This is important information for a buyer looking to acquire the company.

Information Contained

  • Investment Highlights
  • Industry Overview
    • Key growth areas
    • Key competitors
  • Company Overview
    • Products
    • Services
    • Geographic regions
  • Historical Financials
  • Projected Financials (although they may be very vague depending on company management)
  • Management Discussion and analysis of the business

Downloadable CIM Example

 

Credit Document

Overview

Credit documents are presentations utilized by internal risk committees at investment banks to assess the risk of raising debt for a company. Because investment banks take a large amount of risk when they commit to lend to company, they want to make sure that the company is going to be able to pay back all of their debt.

Depending on your role at an investment bank, you may be highly involved in the drafting of credit documents or not involved at all. Analysts in Leveraged Finance, DCM and Financial Sponsors Groups tend to have the greatest exposure to these documents. Industry groups will typically only be asked to fill in the industry specific items.

Information Contained

  • Industry Overview
  • Company Overview
  • Historical Financials
  • Projected Financials
  • Cash flow model projections
  • Credit risks

Downloadable Credit Document Example

 

Lender Presentation (LP)

Overview

Lender Presentations are presentations utilized by investment banks to sell the debt that they raise for a company to large institutional investors. Lender Presentations are very similar to credit documents in that they analyze the credit profile of a company, but now the investment bank is selling the company as a strong credit to investors instead of analyzing the risks of the credit internally.

Again, involvement in the drafting of a lender presentation will depend upon your role investment banking group. Analysts in Leveraged Finance, DCM and Financial Sponsors Groups tend to have the greatest exposure to these documents. Industry groups will typically only be asked to fill in the industry specific items.

Information Contained

  • Transaction Overview
  • Industry Overview
  • Company Overview
  • Historical Financials
  • Projected Financials
  • Cash Flow Model Projections
  • Credit Strengths

Downloadable Lender Presentation Example

 

 

Public Information Book (PIB)

Overview

Public information books or “PIBs” are the some of the easiest documents for investment banking analysts to make. A PIB is simply a resource used by the internal deal team- your associate, VP, MD etc. to remain up to date on all happenings with the company. These books can sometimes be hundreds of pages long, and PIBs commonly include documents such as 10ks and 10qs, equity research reports on the company, industry overviews, earnings press releases and any recent company presentations.

It’s important to note that different deal teams have different preferences for how a PIB is laid out and set up. This is an easy task for any analyst that is not hard to do, but you will look very unprepared and incompetent if you cannot get this task right.

Downloadable PIB Example (Ford)

 

Rating Agency Presentation (RAP)

Overview

Rating Agency Presentation are utilized by investment banks to pitch their clients credit profiles to S&P and Moody’s for the purpose of obtaining a new credit rating. This is an extremely important document because a company’s credit rating will benchmark how much the company will pay in interest on its debt. A RAP is very similar to a credit document and lender presentation, but instead of presenting the credit to an internal committee or external investors, the company is trying to get a high rating from the agencies.

Depending on your role at an investment bank, you may be highly involved in the drafting of credit documents or not involved at all. Analysts in Leveraged Finance, DCM and Financial Sponsors Groups tend to have the greatest exposure to these documents. Industry groups will typically only be asked to fill in the industry specific items.

Information Contained

  • Transaction Overview
  • Industry Overview
  • Company Overview
  • Historical Financials
  • Projected Financials
  • Cash flow model projections
  • Credit risks
  • Credit strengths

Downloadable Credit Document Example