Project Finance Interview

I did a Project Finance internship interview in for a large European bank. Some things that I wish I would've studied before the interviews (although managed to get the job): - Study the difference between CoFi and PF, why would a client choose to finance a project through PF and not through its own balance sheet (Answer things like: Limited recourse because of the SPV, Leveraged Debt, Risk diversification, Political risk diversification, Lenders more likely to participate in workout than foreclosure etc.)

-Closely examine accounting: I had three rounds of interviews from VP to Associate-level, VP being more interested in fit and associates focusing on technical questions. Some technicals were: How the three financial statements are linked, what kind of ratios would you use to estimate project profitability (DSCR and LLCR being the most important in PF, find out what those ratios actually mean. I was also asked to construct a operating cash flow statement.

-Depending on the sector that you're applying to (Energy, Infrastructure, Telecommunication etc.) examine what kind of factors drive both revenues and costs. And what risks are the most important to consider when considering a project in these sectors. For example in RE windmill-project the revenues are determined by the tariff (In Europe quite often feed-in-tariff/premium) and the volatility of supply i.e. the amount of wind in the region. Whereas on the cost side one would evaluate things like construction costs (offshore/onshore). On the risk side you would have things like construction risk, financial risk, political risk depending on the region.

Hopefully this helps. In short: Why to choose PF over CoFi, Accounting and Sector specific issues. Remember that especially for an entry-level position, not all the answers need to be perfect. The line "I do not know the answer but here is what I'm thinking" gets you far also in PF interviews.

Good luck, Cheers.