Hi guys - I have an upcoming interview with a credit fund with a case study. A friend of mine that works at this fund told me the case study is essentially a presentation of a company where there is a borrowing need, lets say for a LBO, and you need to decide which security to invest in with the options being 1st lien, 2nd lien, or equity.
I have no problem building out a LBO model / calculating IRRs but I'm interested to hear people's thoughts on how you decide between the various securities (i.e. 1L vs the 2L). I have a general idea but again, hearing others thoughts would be very helpful as I prepare.
Thanks in advance!