Leveraged Finance Interview - Help

Curious on the technical and fit questions. Worked on a $200M+ secured credit facility recently(Revolver, Term Loan). What questions should I expect (deal pricing, intercreditor issues, reasons for lending , covenants , collateral analysis etc). What should I expect on modeling and technical side.
Are the expectations different when the credit facility is a refinancing deal or a new one

 
Best Response

Only non-standard questions I can think of would be regarding the different types of debt, so try and have a solid understanding of the differences between term loans, revolver, notes, mezz debt, etc (ie relative seniority, maturities, amortization schedule). Have also heard high level questions on the different types of covenants.

 

Think about recent cases in the market and broadly what type of multiples to expect etc. Look at recent deals the firm has done - what are the sponsors, the sector, the type of transaction, whether the firm is leading or merely participating. This should provide additional context to whom you are speaking.

You should also think about what key covenants you would expect (in loans), how credit issues affect the type of capital structure involved etc.

If they ask you a question and you have no idea what the answer is, do not try to find an answer but just say straight out that you do not know it (you may want to joke that you'll probably remember at 2am).

 

My experience at interviewing for a lateral analyst position in Acqusition Finance / Leveraged Finance at a non-BB firm from ops at another firm:

1st round - HR interview (basic competency) 2nd round / final round - was given a short company summary / analysis about 15 pages long, including financials, etc. I was given 30 minutes to read through the document, and give a quick on-the-spot presentation on the company's financial position, and whether a loan should be extended to the company, followed by some further discussion with the interviewers (consisting of an associate and a SVP) for about 30 minutes. Know your ratios (especially those regarding solvency). Last 10 minutes for questions and fit (this bank clearly did not care about fit).

 

"was given a short company summary / analysis about 15 pages long, including financials, etc. I was given 30 minutes to read through the document, and give a quick on-the-spot presentation on the company's financial position, and whether a loan should be extended to the company"

Thanks for the response.

Considering the limited time, what aspects did you focus on when presenting the company's financial position and what areas did you consider when deciding whether or not a loan should be extended?

 
HakodateGyosha:
"was given a short company summary / analysis about 15 pages long, including financials, etc. I was given 30 minutes to read through the document, and give a quick on-the-spot presentation on the company's financial position, and whether a loan should be extended to the company"

Thanks for the response.

Considering the limited time, what aspects did you focus on when presenting the company's financial position and what areas did you consider when deciding whether or not a loan should be extended?

look at secured debt vs unsecured debt. Look at cash flow. look at hard assets, which indentures have liens on assets. See if you can sensitize the revenue. Understand the End-Market and where it is going in the future and why.

 

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