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Typical RX interviews are going to have your usual technical questions (valuation, accounting, etc.), but usually have additional questions regarding debt (value break, capital structure, etc.). Some shops are known to do case studies, such as PJT and sometimes HL, but usually they follow a typical recruiting interview schedule.
With regards to other resources, I'd definitely recommend HL's RX case study. A simple google search should give you the link to that. I'd definitely recommend reading through Distressed Debt, but the HL case study is great in a pinch and as supplementary material since it goes through the entire RX process from a high level view. In preparing for the interviews, I'd definitely have a really good understanding of debt and its relationship to the capital structure, as well as a good general understanding of the RX process. In addition to the resources you've mentioned and the HL case study, the BIWS RX question guide is decent, albeit a bit short.
For the rankings of the banks, the top tier is pretty clear cut. PJT, Laz, and HL lead the pack, with PJT and Laz handling a lot more of the debtor side deals, while HL is known for taking more of the creditor side deals. HL has the largest platform, and usually tops the league tables in terms of total deal size, but they're usually still put behind PJT and Laz. Ducera is pretty new, so I'm not completely sure how they rank out, but I've heard that they're quite good and have a couple of high-ranking bankers from other top firms. They definitely have a SA program, but I believe that you must apply through their website. Although it's might (I emphasize might because there's it's never definite) be a little late in the SA process for a lot of these banks from a target school (if you're looking at SA placement), I'd also definitely consider Moelis, Rothschild (although their SA program is generalist), Jefferies, Greenhill, PJ Solomon, and Guggenheim.
I'd add Evercore Rx as well. Solid debtor focused group.
Link to the HL case study: www.hl.com/email/pdf/subscriptions/bsttcacs.pdf
Thank you.
I'm sorry but what does Rx mean?
just realizing this probably means restructuring haha
Deleted
I can provide a little insight since I participated in recruiting this fall. For reference, I'm a junior at a top target. Competition for PJT and HL Rx was definitely high and I believe only the top kids (high GPA, very good at technicals, great SA experience) made the final rounds for those groups. But it's important to note there's a lot of bias in the application group - most of the kids applying for Rx OCR positions were interested in Rx to begin with so they had a good base understanding. Definitely not a lot of people who just applied on a whim. So what this means is compared to a Bulge bracket IB SA application group, the Rx applicant groups were fairly smaller and more competitive.
If you read and truly learn Distressed Debt Analysis, you'll breeze through most Rx interviews. The only other advice I would give is to try to impress your interviewers by showing your engagement with the space. Being able to talk intelligently about some restructurings and/or investment ideas you see/have seen in distressed debt will make you stand out. Feel free to PM if you want more thoughts.
I work at a boutique RX firm based in the west coast. I will echo what a lot of people have set but will include some things we look for when we hire new analysts. We generally hire analysts with some level of IB or other financial experience.
Definitely understand the different structures of debt and lingo involved in the space: - Know the different classes of debt and how they flow through a debt water fall - Understand the different between PIK interest and cash interest - Understand what DIP financing is and how the seniority of DIP financing is treated during an RX process
Have an understanding of credit metrics and how to interpret them.
How would the valuation of a business in distress be different than the valuation of a going concern business - Generally this involves a stronger emphasis on asset/liquidation value
What options does a company have to satisfy its creditors during the process - Ch 11 - Refinancing - Ch 11 - Run an M&A process - Ch 11 - Renegotiate the debt (generally requires better terms for lender and they generally like pushing for a cash sweep) - File Ch 7 - Liquidation
General valuation and modeling skills. You will be required to model more credit centric models than equity IRRs on LBOs and stuff.
These are some high level stuff. I found the HL case study to be very helpful when I read it two years ago with no understanding of RX.
Best of Luck, XSX
Went through the process a few weeks ago and got an offer from one of those top Rx shops. I read Moyer's distressed debt and had taken a few classes on debt/fixed income previously. To be honest the technicals I got in my interviews weren't that tough.
I will add though that I had a strong resume and it was tough to get the initial interviews.
.
High GPA isn't necessary but the firm had OCR at my school and it was definitely a factor in why I was selected for the 1st round as opposed to some of my peers. I did very little networking with the firm that I landed the offer with. It honestly came down to landing that 1st interview and then performing well in the interviews. Networking is only useful to get that first interview (unless you have a close connection with an MD or something and he'll pull for you throughout the process).
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