Any insights into capital markets interview questions?

ENlGMA's picture
Rank: Monkey | 43

I have an interview coming up. The capital markets group at this bank does everything capital markets related - equity, corporate credit, high yield, etc.

Any ideas where I can find technicals specific to this? I'm sure they will probably ask something about bond pricing and how bonds might trade (corporate vs. high yield for example?).

Comments (21)

Mar 7, 2018

Hi ENlGMA, check out these threads:

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  • More suggestions...

If we're lucky, the following users may have something to say: @Luke-Rotondella" @Walker Texas Banker" @sargung1988"

You're welcome.

Mar 7, 2018

more efforts bro.
DCM is in IB just like S&T and they are not that similar.
read the syndicated loan primer by moody for a good start.

Mar 7, 2018

I recently transitioned to Leveraged Finance at a MM bank. At this bank the LevFin division is housed within DCM, so many of my interviews were with capital markets people. So maybe my experience can help.

The interviews were all very similar to IB, but some had market-oriented components (closer to what you would expect in S&T). Interviews were definitely more IB than S&T, close to 80-20 split, and were a lot more relaxed than what I saw when interviewing for other groups/areas. Initial interviews focused on fit questions and screening on basic technical knowledge, so I would encourage you to go through typical IB questions, ways to value a company, general accounting, etc. Further along I saw more market-related questions thrown into the mix, but a great part of the interviews were about my experience and knowledge of what CM is and what they do. Interview format was either largely behavioral with 1 or 2 technicals at the end (nothing too complex) or we would start off talking about the market, recent deals, etc. and then do some behaviorals.

They were more interested in determining if I had a passion for banking and financial markets, and wanted to figure out if I was a good fit for the team. Remember DCM/ECM is not about hardcore modelling so have the technical knowledge but don't overdo it. Treat the process like an ib interview and have some knowledge of what's going on with the market/company (that I assume you follow regardless), and you'll be just fine. At the end of the day they need to figure out if they're cool with seeing your face 16 hours per day, every day.

The thing that helped me the most was talking with people in the industry and particularly those in the sectors I was going for. Ideally talk with people in the banks you are applying to to get a sense of "what matters" at those places. Have an understanding of what capital markets is and what they do, and have answers to why you want to be at the ECM/DCM groups at that bank rather than other banks/divisions.

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Mar 7, 2018

Well the capital markets consist of markets where money is lent for a period longer than a year. This includes the bond, stock, derivatives, and other markets. I suggest you focus on a smaller picture because there's a lot to cover. You should definitely understand the big picture of the capital markets though and then decide whether you want to dive into the stock market, bond market, etc. is a good resource.

Mar 7, 2018

Any idea on what types of interview questions are likely in regard to IPO's and secondary offerings?

Mar 7, 2018

Any idea on what types of interview questions are likely in regard to IPO's and secondary offerings?

Nope sorry, I'm not doing IBanking, S&T here.

Mar 7, 2018

Look at NYTimes dealbook. They go over current IPOs and secondary offerings.

Breaking Bankers

Mar 7, 2018

I interviewed at a BB for a capital markets SA stint recently. I wasn't asked any technical questions specifically related to capital markets. The only "technical" question was a random one on Black-Scholes; he just wanted me to tell him the different variables and stuff. You should just have a good knowledge of what all is going on in the global economy, how credit markets are thawing, I believe there were three minor IPOs recently, LIBOR-OIS spreads are at lowest in a year etc.

Mar 7, 2018

Distressed investing by Moyer. Dude you spend way to much time worrying about your internship and about technicals. The best thing you can do is have a good attitude and work hard. Said another way get ready to run through walls for people. As long as you are not completely slow on the uptake you should do well for yourself. But now that we know your identity we will all be on the lookout for you at Citi. Not to many Uof F kids there. ;)

Mar 7, 2018

Never heard of a case study for a banking job...and I worked in capital markets at two different banks...

Mar 7, 2018

Understand capital structure: specifically, between bond, loan, equity, private placement, etc...which will be the best strategy for the company to raise capital?
Financial covenants: which ones and why?
Walk through the process of sourcing deal, analyses (DCF, Comps, LBO), possible syndication, marketing, credit agreement, pricing,etc...

Mar 7, 2018

It's more of a fit interview and much less technical than an IBD interview.

Make sure you are up to date on the markets in general (GDP, stocks, bond yields, interest rates).

You should also look at the recent capital markets offerings (both primary and secondary). Register for a free Thomson Reuters Deal Intelligence account.

More importantly, definitely have well thought out answers for these questions at a minimum:
1) Why investment banking?
2) Why capital markets (versus IBD or S&T)?
3) Why XYZ bank?
4) Why are you the best candidate for the job/internship?
5) Where do you see yourself in 5 years?

Make sure you are honest and non-generic about your answers to those five.

Mar 7, 2018

I would be interested in information provided in this thread, too!

but for me its because I will be applying to S&T SA roles next year!

Mar 7, 2018
Mar 7, 2018