Leverage loans/ CLO interview prep?


I have an entry level interview with a CLO manager. Some prior experience with IB. What can I expect in terms of technicals? 

For anyone who works in this industry, why did you choose this over say IB, PE etc? What are pros cons working in this industry?  Why credit over equity side of the house? 

What is the industry like? What are the comps like? Lower than IB I assume? 

This is an entry level position so think intern -analyst 1 sort if a position.

Really appreciate your time and help! 


Comments (6)

Most Helpful
  • Intern in IB - Gen
Jan 23, 2022 - 9:07am

Questions will depend on your background; eg they won't be the same if your experience is in levfin compared to m&a

Know your accounting inside out, be prepared to get asked on different types of debt within the capital structure, why they may buy one layer and not the other, etc. They'll probably be focused on cash flows so make sure you're ok with that, the possible adjustments, etc.

The other thing is the CLO work itself, maybe try find out how actively they trade, different stages they buy at (some are more focused on buying from other people instead of buying at syndication), how much diligencing they do (again this will depend on the wider strategy; if they're more long only type they might do more dd).

  • Associate 2 in PE - Other
Jan 23, 2022 - 10:04am

Probably nothing other than standard technical plus and added layer of knowing some credit analysis 101 

  • Analyst 1 in CorpFin
Jan 23, 2022 - 11:12am

LCD Leveraged Loan Primer, can find it if you just google it. It's free and on S&P's website.

Also if you can find the Citi Credit Primer, that's a good resource as well.

  • Associate 2 in PE - Other
Jan 23, 2022 - 1:05pm

Other user gave some good resources. Just make sure you know credit metrics such as debt / ebitda, debt service coverage, DSO/DIO/DPO/cash conversion, broad topics including covenants, general security rankings like 1L 2L etc, and what sort of things a credit investor cares about and the subsequent business drivers of those things

Jan 23, 2022 - 7:21pm
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