Structured Finance Interview, ABS/CMBS
Can anyone give me an idea of what I can expect or how to prepare for an interview with a boutique structured finance firm? They deal heavily with asset backed and commercial mortgage backed securities. I thought it would be a lot of fit, since it is a small shop but was told the interview would last more than an hour...
Any input/suggested readings is much appreciated.
Fit, probability, brainteasers, etc. Know what negative convexity is as well as the role of structured products in the financial crisis.
Check out the trade organizations - ASF (All structured), CREFC (CMBS) - they will give you some good info on the big picture items in the industry and will show that you at least had some sense to know where to look. Also check out the data providers Trepp (CMBS data), LoanPerformance (Resi Mortgage Data), they may have some good high-level free info.
Also, lot of people talking about European CMBS as one of the last dislocated markets that offer the best risk adjusted returns of any fixed income market.
Personally think if you go in talking about negative convexity you will get laughed at, but definitely know what it is, as well as duration weighted average life and option adjusted spread.
CMBS Interview (Originally Posted: 03/29/2015)
I have an upcoming interview with a CMBS conduit for an associate position in originations and wanted to know if some of you guys could provide me some insight on the following:
Thanks in advance
Anyone?
Typical day -size loans for potential deals -collect documents from third parties -collect (chase) borrower for data, signatures, forms, etc -conference calls w borrower, broker and lawyer to move the deal along
Overall CMBS is about the process more than the analysis. Analyzing a deal and sizing the loan isn't all that difficult, it's getting past the goal line that is the hard part.
From what I've seen there is very little modeling involved, shops have thier preset model that you just I out the data into (the skill is assessing the data) not the model itself.
Technical skills -debt metrics such as LTV, DSCR, debt yield, rating agency LTV
Mezz -depends on the shop
All correct. I would say as well that process management is key in CMBS.
Be aware that the remark on modelling will not hold true everywhere. In my bank (BB) the US team is very efficient (apparently they rarely manually model anything there, and use internal software to do everything), whereas in Europe we do most of the modelling in Excel, and put together ad hoc structures (comparable to usual IB) for deals. In terms of technical skills, my group - in Europe - would require strong modelling abilities. To give you a rough idea of the level, I previously worked in M&A, and found modelling in CMBS (and RE in general) to be more demanding. Beyond projecting property and loan cash flows, the modelling also involves analysing large amounts of data in a flexible, robust manner (i.e. pivot tables are fine to answer a quick question - but proper output tables must be formula based, and highly flexible).
I would concur that being able to organise, verify, and analyse data is a fundamental skill in this business. Additionally, presenting data well is also great skill to have. Generally speaking, you need to be very strong on both analysis and synthesis in order to cut through sheets and sheets of data to get to the key takeaways.
On the Mezz question, we focus exclusively on senior lending. However, we do sometimes originate pre-placed mezzanine facilities, in situations where we feel this would be appropriate given the debt amount required.
Thanks. Really appreciate it.
any updates or new thoughts?
run.
I know there's a lot of successful CMBS players out there that do great work. In no way whatsoever am I discrediting them or the loans - because they're a great product. Given the MASSIVE CMBS loans maturing this year and next though I'm not sure it's an piece of the industry I'd be moving into. I'd go bank side over CMBS side. You're looking at (don't quote me on this) an estimated 40% of the CMBS loans defaulting in 2017/2018. These were the 10 year loans made in 2007/beginning of 2008.
Again, make your decision on the job interview and offer but be wary of the impending "doom" that some have said is coming to the CMBS market.
Sounds like an interesting and exciting position though.
Do you mean defaulting or maturing?
CMBS analyst interview (Originally Posted: 04/18/2013)
have an interview for a cmbs analyst position and was wondering what types of interview questions might come up.
job entails: Assist in providing financing solutions to corporate clients - underwriting and structuring deals conduct financial analysis, preparing credit packages, and monitoring existing deals create pitches, proposals, and marketing materials. interface with internal and external clients
Had a CMBS research internship..Just from seeing what the group did I'd expect questions on cap rates/absorption/other CRE fundamentals, different valuation methods, current spreads, best markets and property types at the moment.
What is your background? Is this for a bank or a boutique shop?
ABS/MBS Capital Markets Interview (Originally Posted: 01/17/2013)
Hey all,
I have an ABS/MBS Cap Markets interview coming up, but I don't really know what to expect. I exhausted the search feature--can't really find anything specific to my question. Thanks for any help!
hey bud... i've been trading all over abs/mbs map. where ru interviewing? im sure i know some1. u can get me @ [email protected]
Holy smokes, this is exactly what I'm interested in. How did your interview go? What sorts of questions did they ask?
CMBS Analyst Lateral Interview (Originally Posted: 04/14/2013)
I have an interview at a BB for an Analyst position in the RE Finance/CMBS group. The group underwrites CRE loans for all property types, and sells them via syndication or securitization.
It sounds like the group has a huge pipeline, and really needs to add junior staff ASAP. I already had a phone interview, and it was basically 100% fit. Analyst responsibilities include screening potential deals, supporting underwriting and origination efforts, and supporting syndication/CMBS sales efforts through the preparation of offering materials, bond prospectuses, rating agency materials and managing the data room site.
This is off-cycle recruiting, so it may be a little different from the typical superday format. Can anyone provide insight on what type of questions I should expect? I currently work in RE Finance, so I feel fairly comfortable with potential technical questions.
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