A Definitive Guide to Debt Capital Markets

Companies employ various methods to raise capital from the market. Sometimes, firms need to raise debt for maintaining their business cash flow. In raising debt, they have to collect funds and need to pay an interest on these funds. Raising debt is different from trading equity/stocks, as the former does not involve selling a percentage ownership of the firm. A DCM (debt capital market) can help firms raise debt and accumulate funds.

Debt Capital Markets (DCM) Support For Investment Banks | Acuity Knowledge Partners

Read on to know more about DCM investment banking.

Describe Debt Capital Markets

Many companies the world over use debt capital markets to trade debt securities including corporate bonds, credit default swaps and other negotiable financial instruments. All these trades help businesses raise debt or cash and sustain their future operations. For the layman, it is akin to borrowing money on interest from a reliable source; but organisations require larger sums of money that carry stringent terms and conditions.

Sometimes companies face shortage of funds, reducing or eliminating their ability to pay existing debt. In such situations, DCM helps in debt refinancing or restructuring. Firms also use debt fund to acquire another firm. Debt raising via DCM involves evaluating various routes to unearth the best possible interest rate.

What do DCM Teams Do?

A DCM team helps companies arrange funds at a lower interest rate and in the shortest possible time. It consists of investment bankers well versed in their trade who help pitch clients for debt issuances. DCM investment banking requires knowledge of interest rates in the market.

Debt Refinancing Via DCM

Suppose a company has a debt of USD100m, maturing in the next six years. It notices that interest rates have dropped, so it can refinance its debt at a lower interest rate. It will find a reliable lender via DCM that can clear its previous loan and issue a fresh loan at a lower interest rate. A reliable DCM advisory firm has subject-matter experts who are well aware of the market situation and can help in debt restructuring/refinancing.

Is DCM different From Leverage Finance?

Leveraged finance involves the use of high-yield bonds for buyouts, acquisitions, etc. by companies looking to grow their business. On the other hand, DCM focuses on investment-grade issuances necessary to sustain the business. In some cases, similar to syndicated debt assignments, DCM investment banking may overlap with leverage finance.


A firm can rely on DCM support from a reliable advisory firm to raise debt with the assurance that no laws or protocol will be compromised. DCM investment banking can significantly reduce the interest/loan burden on a firm/organisation.

Choose DCM support for debt raising now.

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