Front Office Investing interview prep.

Behavioural questions to expect

1. Walk me through your CV.
2. Tell me about your most impressive credit or financing analysis.
3. Tell me about a weakness, a failure, or feedback you've received and worked on.
4. Why private credit / direct lending? Why not PE or liquid credit?
5. Why the firm?
6. Why {sponsor-backed / non-sponsor} lending — or why {lower / upper}-middle-market — over the alternative?
7. How would you describe the firm's origination and underwriting edge in your own words?
8. How do you think the firm manages risk on a single credit and across the portfolio?

Technical concepts to master

• The direct-lending underwrite — the workflow

  Business quality · Leverage + coverage · Downside case · Structure + security · Pricing + return

• Structure + pricing

  Unitranche · Floating rate (SOFR + spread) · OID + fees · Call protection

• Covenants + documents

  Maintenance vs incurrence · Security + guarantees · Covenant headroom · Baskets + liability management

• Downside + recovery

  Downside / stress case · Equity cushion / LTV · Recovery / LGD · Watchlist + workout

• Sponsor quality + returns

  Sponsor quality · All-in yield · Net return = yield - losses · Fund leverage

Practical drills

• Walk me through how you'd underwrite a senior secured / unitranche loan to a sponsor-backed company in the firm's segment. 5 min prep, 5-7 min delivery. Be ready to be probed on leverage, downside, covenants, and pricing.
• A borrower has $80m EBITDA. You're asked to provide a unitranche at 5.0x leverage, priced SOFR+550 with SOFR at 4.5%. (a) Loan amount and pro-forma interest? (b) Interest coverage? (c) If EBITDA falls 25%, what happens to leverage and coverage — and do you still like it?
• You lend $400m at SOFR+550 (SOFR 4.5%) with 2% OID and a 2% upfront fee, expected life ~3 years. Roughly what's the all-in yield, and why is it higher than the spread?

Smart-question anchors

• Origination + sponsor relationships — where the firm's deal flow comes from and how an analyst contributes
• Underwriting standards — the firm's leverage discipline, covenant philosophy, and how it says no
• Portfolio monitoring + workout — watchlist process and how the firm handles a deteriorating credit
• Pricing + returns — how the firm thinks about all-in yield, loss rates, and fund leverage / net returns
• Analyst role + autonomy — origination vs underwriting vs monitoring, and the path to leading deals

Sourced from

Mergers & Inquisitions — Private Credit Interview Questions · Wall Street Oasis — Private Credit Interview Q&A · Private Equity Bro — Direct Lending / Unitranche + Top 50 Private Credit Questions · Cambridge Associates — Private Credit Strategies: An Introduction · IB Interview Questions — Private Credit and Direct Lending Explained · Wall Street Prep / Corporate Finance Institute — credit ratios + leveraged finance