Communication & Negotiation

Question 1

• What is an Information Memorandum?

Answer 1

Overview of a deal for marketing purposes to convince potential investors/lenders.
It includes: Exec summary, sponsor overview, business plan, asset overview, financials, market overview.

Question 2

• What did you learn on your negotiation course?

Answer 2

Types of negotiation and when to use them: competing, collaborating, compromising, accommodating, and avoiding

Question 3

What are the types of communication?

Answer 3

Types of communication: Written, verbal, non verbal, listening and visual

Question 4

• Why is listening important in negotiation?

Answer 4

Think about a negotiation – part of the process is to assess what the opposition wants and needs. Without listening, it is impossible to assess that, which makes it difficult to achieve a win/win outcome.

Question 5

• What was the benefit or collating the meeting minutes?

Answer 5

Future engagement easier and dispute resolution

Question 6

• What was the overview of the debt market?

Answer 6

Debt fund domination - Senior lenders on pause
London focus – still keen pricing (2%)
Active lenders
LTV fall

Question 7

Impact of COVID on the debt Market?

Answer 7

Yes – why debt funds were active and ltv and prices were impacted

Question 8

What were the key metrics of the debt tracker?

Answer 8

total volumes, sectors, investment/development

Question 9

• What’s the difference between investment and development facilities?

Answer 9

Investment: Income producing, standing asset
Development: Building to be constructed, no income

Pricing
Drawdown
Commitment
Income
Repayment

Question 10

• What is the mean pricing? What’s another way to look at risk of an investment?

Answer 10

Standard deviation - Find the variance, which is the sum of all deviations from the mean squared, divided by the number of samples. Standard deviation is the square root of this and 95% of all outcomes will come within 2 times this.

Question 11

What’s the difference between a financial memorandum and information memorandum?

Answer 11

Information memorandum is produced when marketing an asset - A financial memorandum is used in our debt and structured finance team and focusses on the potential financing of an asset

Question 12

How would you calculate the variance of from the mean pricing?

Answer 12

The sum of all the data points distances to the mean, squared, Divided by the number of data points.

Square root of this is the standard deviation. 95% of all outcomes would be within 2 times the standard deviation.

Question 13

Give an example of a negotiation you’ve been in and some of the tactics used.

Answer 13

On a debt raising mandate - One potential funder met our loan amount request but was over-priced. We knew that are client was flexible on the loan amount to a point, however was steadfast on pricing. We managed to negotiate a cheaper price for a slight fall in the loan amount. Done by understanding the other parties position, knowing where we’d drawn the line and win-win.