Hi WSO,
It probably isn't prudent to post a job description on this blog. However, I was wondering if someone could assist me on what technical knowledge and skills should I know inside and out for a role like this? What technicals would they ask during an interview? Its a structured finance role at a bank focused on advisory.
Job Description
The Financial Advisory, Structured Finance will be a strategic advisor to our clients in financing and other situations, and support the transaction process from origination to closing, including, origination, structuring and modeling, diligence, lenders presentations and coordination, and negotiation of definitive of documentation, and leading defined workstreams. Activities will include providing relevant content and advice to clients related to financing and strategic transactions.
Essential Functions/Responsibility Statements
- Assist in developing and maintaining new and existing client relationships, to support the team in growing business in the region, including preparation of marketing-related material.
- Provide essential support to deal team leader(s) the team through all steps of the origination and marketing phases (preparation of marketing materials, credentials, pitches, and any advisory materials).
- Financial modeling: build and analyze cash flow models and run sensitivities.
- Review due diligence materials (market, technical, insurance, legal, tax) and interact with relevant advisors in Q&A sessions.
- Support in structuring the transaction: by reviewing the key features of the financing strategy and any financial documentation.
- Prepare content that increases or maintains knowledge of the Energy and Infrastructure sectors, as well as current market conditions and financing trends.
- Prepare and support the preparation of structuring materials and financing analyses for pitches and live mandates.
- Develop complex financial models for financial advisory and other purposes and lead the team in modeling good practices.
- Operate within compliance parameters and demonstrate sound business judgment.
Qualifications
To perform this job successfully, an individual must be able to perform each essential duty satisfactorily. The requirements listed below represent the knowledge, skill, and/or ability required. Reasonable accommodations may be made to enable individuals with disabilities to perform essential functions.
Education
- Bachelor's Degree, or equivalent degree and/or work experience.
Work Experience
- 3+ years of relevant experience, including M&A.
- 1+ years in developing complex financial models.
- Preferred sector experience: Energy transition, traditional energy, power & renewables, and infrastructure.
- Understanding project finance, structured credit, asset finance, M&A, and energy transition or renewable energy is helpful.
Based on the most helpful WSO content, here are the technical skills and knowledge areas you should focus on for a structured finance role, especially in an advisory capacity:
Key Technical Skills and Knowledge Areas:
Financial Modeling:
Valuation Techniques:
Due Diligence:
Transaction Structuring:
Sector Knowledge:
Compliance and Business Judgment:
Interview Preparation:
Technical Questions:
Behavioral Questions:
By focusing on these areas, you'll be well-prepared for a structured finance interview in an advisory role. Good luck!
Sources: https://www.wallstreetoasis.com/forum/investment-banking/how-to-prepare-for-restructuring-technical-questions?customgpt=1, Technical Skills to Prep for SA S&T, what's the hardest technical you've been asked in interviews, What was your approach preparing for technicals? Could use some guidance., What are technical Skills I can foster as a Sales?
I am thinking DSCR, debt sizing, and valuation, but I don't want to have to review LBO and merger models if it's not necessary.
Without knowing anything on your background, here would be my technicals in order, assuming you had finance experience but maybe not a structured background you can reply with responses & we can walk through them together. Think these are all fair game though.
- What is securitization & why might a company chose to utilize it for financing
-what are the main characteristics that make securitizations a more viable form or financing?
- walk me through a high level cashflow model like it’s my first time ever hearing of it
- what are macro implications that could effect an underlying cashflow model
-what are the effects of higher than expected prepayments, why isn’t this always a good thing?
- what is overcollateralization, why is it important in our deals?
- what are the different types of securitization structures, can you name a benefit of each
- walk me through the cashflow build of an asset you know, what are the main protections for lenders?
- in a bx scenario, what is my recourse?
These are a decent starting point. All these can be answered with online resources. But happy to talk thru responses bc structured isn’t always black & white. Lmk
bonds and accounting technicals
OP, is this for a shop that does infrastructure financing? Does the shop have credentials in raising money for power plants, toll roads, and prison deals ?
If so, ByeSide's may sadly have nothing to do with your role. It could instead be for an Project Finance position. European's like to call it "Structured Finance" despite the confusion with how Americans use it for MBS and CLOs.
Read up on how a project finance structure typically works, the kinds of risks (EPC, O&M, Legal, Technical, Market risk) and how a project financier would look at financing say a wind farm vs a combined cycle gas plant, or a highway.
Denton's has a good beginners guide, even if intended for lawyers. Ed Bodmer has a website that goes into the weeds for modeling.
This is for an infrastructure financing role at a bank. Thanks a bunch. Do you know what questions they would ask in an in person interview?
To group them it'd be:
1. Questions on the financial accounting for project finance.
The ratios you want are DSCR, LLCR, PLCR, and don't forget Equity IRR (advisory = working on projects from equity perspective).
Understand what those ratios are and how they are used (i.e. what would a project finance lender think if they saw this ratio). Generally, ratios are there to assure lenders that the project will pay back its debt. If a project is risky, lenders demand higher ratios.
Look up typical ratios for projects that face demand risk, and ratios for projects with guaranteed demand. Generally, projects with guaranteed revenue (i.e. a prison that the mayor will pay money to for each day its open) have DSCRS towards 1.20x-1.30x, whereas riskier projects tend close to (but in my limited experience never touch) 2.0x.
2. How different assets make money and their associated.
Your JD mentions Energy and Infrastructure. Generally, these are two different asset class types that nonetheless are very common in Project Finance.
Infrastructure is basically any asset essential to public society: prisons, highways, bridges, schools, airports, etc.
Energy typically deals with wind and solar power plants, with some combined cycle glass plants if you're bank is more traditional. Basically anything to do with big assets that provide energy.
Find an old crusty infrastructure investing book that talks about common revenue and risk drivers for these kinds of assets. If you know your shit cold, you can impress an interviewer. You may be asked how to value an airport and that will require going from passenger demand all the way to dividend distributions, for example.
3. How a Project Finance structuring is, erm, "structured"
Project Finance at its core refers to a special financing technique that's adapted to assets that earn money via long-term contractual agreements. There's a common schema of agreements, counterparty relationships and financial obligations that allows a deal to be "considered" Project Finance.
Sure, the types of assets you encounter repeat themselves, but generally, if the asset and its business model are secured via contractual agreement, you can fund the asset via a project financing. I yearn for the day when banks will rush to pat themselves on the back for having funded asteroid strip mining.
You need to know, at the minimum, what these techniques and tools are. The Denton's guide should give a good rough idea. Any academic book works too (this isn't like M&A where you have a 400 questions pamphlet to brute force).
But generally, the idea is that you create an SPV that borrows money so that your own assets can't be seized by lenders.
In order to convince lenders that lending without recourse to your personal assets is a good idea, you emphasize how "guaranteed" the project and its cash flows are: the construction contractor is good, the city gov't promised to pay us, our suppliers promise to not fuck us by jacking their prices, and we have signed documents to prove all this.
Lenders like these kinds of deals because in return for some specialized due diligence (you will read too many contracts), they access higher-than-average spreads for a reallly long time (15-30 year long tenors).
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