The bottom has fallen out of the leveraged finance market, but there don’t seem to have been many redundancies – yet.
Sharad Jain, director of the financial institutions ratings group at Standard & Poors, says there’s certainly been a significant increase in pricing associated with lending into leveraged finance transactions.
“Given the current market volatility, the Australian banks are increasingly cautious about lending to corporates, particularly those who are more leveraged,” he reports.
This is bad news for job prospects, with one Sydney-based head hunter claiming his firm’s clients have zero interest in expanding their leverage teams.
Luke Heath, owner of recruiters Chandler Heath, says, “We have seen previously critical vacancies go on hold, and we hear candidates describe how quiet things are, but we have not seen specific redundancies.”
As for remuneration prospects, Heath says it depends on the firm but that a leveraged finance specialist with three to five years’ experience could previously earn AU$150k to AU$275k base, with 100-300% bonuses. “Some bonuses paid recently were still reasonable because the first half of 2007 delivered good deal flows,” he adds.
Mary Grant, principal consultant in recruitment firm Hudson’s banking and finance division, isn’t convinced job opps in leveraged finance have vanished and is critical of market scaremongering.
“We all know the global debt markets are in trouble, and the impact for the foreseeable future is that debt specialists will continue to be redeployed internally. This is squeezing hiring budgets in other areas, such as leveraged finance, and gives the impression no one is hiring across the board. However I don’t agree that leveraged finance hiring is at an absolute standstill.”