What is the role of investment banks in debt financing on Wall Street?

Investment banks play a crucial role in the world of finance, particularly in debt financing on Wall Street. Debt financing is the process of borrowing money from investors to fund business operations or other expenses. Investment banks assist companies and governments in raising funds through the sale of bonds, notes, and other types of debt securities to investors. These investment banks act as intermediaries between the issuer of the debt and the investors who purchase the securities.

Investment banks offer a range of services related to debt financing, including underwriting, which involves assuming the risk of buying the securities from the issuer and reselling them to investors at a profit. Investment banks also provide advisory services related to structuring the debt, setting the terms and conditions of the securities, and determining the interest rates that will be paid to investors. In addition, investment banks help to market the securities to potential investors.

Investment banks also play a crucial role in debt financing through the process of securitization, which involves bundling debt securities and selling them as a single security to investors. This process helps to spread the risk of the debt among a large number of investors.