Functions of Investment Banking: Capital Raising through Debt Financing.

Introduction Investment banking is a cornerstone of the financial markets, enabling companies, governments, and institutions to raise capital for growth, operations, or refinancing. One of the core functions of investment banks is debt financing — assisting organizations in raising money by issuing debt instruments like bonds, debentures, and commercial papers. This blog post explores how investment banks facilitate debt financing, the types of debt instruments involved, and why companies prefer debt over equity at times. What is Debt Financing? Debt financing involves raising capital by borrowing money that must be repaid over time with interest. Unlike equity financing, where investors buy shares of a company, debt financing creates an obligation for the issuer to pay back the principal amount along with periodic interest to the lenders or bondholders. Role of Investment Banks in Debt Financing Investment banks act as intermediaries between the issuing com...