Front Office Investing interview prep.

Behavioural questions to expect

1. Walk me through your CV.
2. Tell me about your most impressive credit or restructuring analysis.
3. Tell me about a weakness, a failure, or feedback you've received and worked on.
4. Why credit / distressed? Why not equity long/short?
5. Why the firm?
6. Why {performing / stressed / deep-distressed} credit — or why a {single-manager / multi-manager pod} platform — over the alternative?
7. How would you describe the firm's credit process and edge in your own words?
8. How do you think the firm manages risk on a single credit and at the book level?

Technical concepts to master

• The credit pitch — the scaffold

  The instrument + price · Thesis + stress level · Recovery-in-default (the floor) · Catalyst + timing · Asymmetry + sizing

• Credit metrics + bond math

  Leverage + net leverage · Coverage (interest + FCCR) · Price in cents + yield · Maturity wall + liquidity · LTV + asset coverage

• Covenants + the documents

  Maintenance vs incurrence covenants · Security + guarantees · Restricted payments + baskets · Liability management (priming / drop-down / uptier)

• Capital structure priority + recovery + fulcrum security

  The waterfall — senior to junior · Recovery rates — directional norms · Fulcrum security · Going-concern vs liquidation EV · Absolute priority rule (APR)

• The restructuring toolkit

  Out-of-court vs Chapter 11 · DIP financing · Debt-for-equity swap · Loan-to-own / distressed-for-control

Practical drills

• Pitch me a credit in the firm's sub-strategy — name the tranche, the price in cents, and why. 5 min prep, 5-7 min delivery. Be ready to be probed for 10-15 min on recovery, covenants, and downside.
• A company has $600m EBITDA, $3.0bn total debt, $200m cash, and $360m annual interest expense. (a) Gross and net leverage? (b) Interest coverage? (c) Its senior unsecured bonds trade at 72 cents — what does the price plus these metrics tell you about stress and likely recovery focus?
• A distressed company has a going-concern EV of $1.2bn. Capital structure (par): $700m first-lien term loan, $600m senior unsecured notes, $250m subordinated notes, then equity. Distribute the value under absolute priority. What recovers what, and which is the fulcrum?

Smart-question anchors

• Sourcing — where the firm's credits come from (new issue, secondary, stressed, restructurings) and how an analyst contributes
• Where in the structure the firm plays — senior / fulcrum / across the spectrum — and the target return for each
• Restructuring + activism — whether the firm takes active-creditor / loan-to-own roles and how it staffs the legal / process work
• Risk + downside discipline — single-name caps, recovery loss budgeting, liquidity / mark-to-market discipline; a recent example
• Analyst autonomy + PM partnership — how much an analyst's recovery view drives sizing and the book; the path to running risk

Sourced from

Mergers & Inquisitions — Distressed Debt Hedge Funds · Wall Street Oasis (WSO) · Restructuring Interviews — Distressed Debt / Special Situations · 10X EBITDA — Credit / Distressed Fund Interview Coaching · Simpson Thacher — Leveraged Finance 101: A Covenant Handbook · Wall Street Prep / Corporate Finance Institute — credit ratios