DCM Analyst Interview - HELPP

Hello people,

I have an interview for DCM Analyst at a relatively small IB. I have a few question and would really appreciate if someone could help me. I am relatively new to this.

Firstly, they told me this position they are dealing with HY Euro bonds and IR derivatives - What's the best way of preparing the technical side? Apart from basic stuff what else should I know?

Second, How much financial "modelling" should I learn? On the phone interview they told me I should know modelling of financing, refinancing and hedging opportunities.

And lastly, they also said I'll be "researching industries, companies and comparable transactions" for providing structuring advice. What does this mean and how should I prepare?

I know it's a lot of questions, but my interview is in a few days and I'm freaaakkkkking out.

Thanks,
Jenna

 

You are helping companies raise/issue debt, so you need to look into how credit worthy they are. The modeling will require you to understand how cash flows work and you should know certain ratios (quick ratio, coverage ratio, leverage ratio, z score) how to get them and what they mean. You will have to research similar companies to compare your modeling to and compare issues (transactions) to. Know where all the major rates are at, how bond indicies have been moving (check out the bloomberg ones) and know where current events fit in to this area.

 

Your teaser should contain their rating and any relevant metrics. I'm almost certain that Moody's and S&P post their rating criteria, they may even have a spreadsheet where you can plug in all your relevant information and it'll spit back out a rating based on their formulas. So then once you have the rating you find the metrics for similarly rated companies and compare your companies to those. You want to highlight the areas where your company outperforms the other companies of the same rating. That'll be a good reason for a mutual fund to invest in your company as opposed to a 'weaker' one for the same yield. That's how I would go about it.

This to all my hatin' folks seeing me getting guac right now..
 
mrb87:
For levered, use Microsoft, GE Corp (not Capital!) or Johnson and Johnson (believe they are AA). Unlevered...Apple? But not sure if they are even rated given they have no debt.

Is this really for a reputable bank? How old are you / what is your exp level? Frankly this is a ridiculous and unnecessary exercise.

I completely agree. Is this for a 1st year analyst gig in the US? Seems a bit much.

 

Also, like mrb mentioned you aren't really going to find a rating for a company with no debt because there would be no point for the ratings agency to issue one. You can find one with very little debt and use that as your unlevered.

This to all my hatin' folks seeing me getting guac right now..
 

Moody's and S&P ratings. Coupon rate. Available FCF to service interest payments. Debt/EBITDA. Maybe performance of bonds from similar companies in industry. Company's story. Outstanding debt on the company's balance sheet.

This is a weird ask. They shouldn't expect you to know this stuff unless you have previous experience in LevFin.

 

Yield curves, rates, views on the economy, refinancing walls 2013/2018, Basel regulations and how you like the idea of advisory work which is linked to the markets.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

Hi Michael-Cohen, any of these threads helpful:

If we're lucky, the following pros may have something to say: nagulni diverse_kanga jimbofinance

I hope those threads give you a bit more insight.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Thanks makingclocks for your reply. Could u elaborate as your point of it being part of S&T? And in that case could u elaborate on topics which i need to prepare on and skills i need to show them keeping in mind the job description i have posted above.

Reply wud be of immense help to me.

 

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