LATAM DCM interview
So I managed to get an interview for LATAM DCM analyst.
I am currently in Asset Management.
Is there anything I should be worried about other than know the CFA L1 section of fixed income?
I just wondering considering that LATAM covers a couple countries, they may ask hedging questions?
The description says candidates need to have experience in analysis of financial statement and fundamentals like financial modeling. What type of modeling is done in fixed income, is it just comps? Also understanding of bonds and derivatives. Any idea what the derivatives part might comprise?
Anything other than knowing comps, whats going on in the world, duration, convexity, etc?
I appreciate the help!
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I recently went through an interview with DCM of a top BB, are you interested in knowing what was I asked or anything specific to LATAM? I can help with the first, not with the latter.
From my experience:
-Macros (GDP, rates, recent published figures like new orders, unemployment, PMI) -Effects of Forex movements on pricing and issuing -Duration (“what type of bond has the highest duration?”) -Know what a syndicate deal and tombstone actually looks like (how the desks interact and the parties involved) -Bond ratings (unrated and what comps to use, what goes into the rating, why a company would issue unrated bonds etc) -The usual accounting -Leverage and liquidity ratios -Be able to explain the difference between DCM sand Levfin (some banks have Levfin inside DCM and some don’t) -This is hard (I couldn’t figure out where to get the info) but if you can get your hands on some actual debt paperwork to see the legal aspect (prob overkill for analyst interview but it was recommended to me by someone in a DCM desk) -Concept of Risk free -Look up recent deals they’ve done and if you can I would try to figure out whether at your bank DCM is considered a good standalone desk or if they are kinda just used as a complementary product that M&A uses to woo clients. Meaning: “if M&A has a rough year, will DCM also?” Happy to help Via PM too, Good luck!
I would add:
Exercises to how is a bond trading if he gives you coupon, principal and interest rate
what are CDOs, CDS and explain how would you sell them to investors - also if a bank should emit them or not based on different market conditions.
Difference between high yield and investment grade (DCM usually only deals with investment grade, acquisition/levfin with high yield)
Credit swaps: exercises with hedging and if I was able to understand it.
Also basically more S&T questions - what was the US 10y yield? Could I infer the yield of a given company?
FaberGrad summarised it very well, I am just pointing out the differences with my interview.
Best and GL!
Great stuff, forgot to mention yield stuff and CDOs and that’s maybe the most important stuff, SB to you sir
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