Debt Capital Markets interview preparation

Bond mechanics, duration, credit spreads, ratings, primary issuance, syndicated loans, structured credit, covenants and liability management, plus the Indian debt market. Every question is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it.

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100 questions, mapped to the firms that asked them

Questions: 100
Traced to a firm: 45
Firms: 26
Updated: September 2026

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048Value this construction company and tell me whether they are worth lending to.Credit modellingHardcase studyBain CapitalCredit · New York · 2024
Say this
Construction is one of the hardest credits there is, so I would lead with that. Value it on a low mid-single-digit EBITDA multiple, discount the earnings heavily for contract risk, and lend only against a secured, amortising structure with tight liquidity covenants — or not at all if the contracts are fixed-price and the backlog is concentrated.
Then walk it
1. Valuation first: EBITDA times a multiple, and construction trades cheap — typically 4 to 6 times for a contractor, versus 10-plus for business services, because earnings are project-based, low-margin and non-recurring. Cross-check against net asset value, since plant and equipment have real resale markets.
2. The critical adjustment is that reported EBITDA is an accounting output, not cash. Percentage-of-completion accounting lets a contractor recognise profit on estimates of cost to complete. So I would look at cumulative cash flow versus cumulative reported EBITDA over five years. A persistent gap is the single biggest red flag in the sector.
3. Then the specific risks: fixed-price contracts with input cost inflation, which is what killed Carillion; claims and variation disputes that sit as receivables for years; performance bonds and surety capacity, which is a hard constraint on growth; joint and several liability in joint ventures; and single-project concentration.
4. Working capital is brutal and cyclical. Retentions, milestone billing and advance payments mean the balance sheet can show net cash at the peak of a billing cycle and a hole three months later. So I would look at average rather than period-end net debt.
5. The lending decision: yes, but structured. First lien on receivables and equipment, an amortising term loan rather than a bullet, a minimum liquidity covenant rather than just leverage, monthly reporting on contract-level margins, and a hard cap on new fixed-price work. Leverage no more than 2 to 2.5 times against a business I would lend 4 to 5 times if it were subscription revenue.
6. And I would say what would make me decline: backlog concentrated in one or two fixed-price contracts, a reported-versus-cash EBITDA gap, or a surety provider pulling capacity. Any of those and the answer is no at any price.
Where candidates lose it
Applying a generic EBITDA multiple and a generic leverage test. This sector's whole point is that reported profit is an estimate and the working capital cycle is deceptive. If you do not mention percentage-of-completion accounting or average versus period-end net debt, you have missed why they chose construction.
Expect next
- How would you test the cost-to-complete estimates?
- What leverage would you actually lend at?
- What single disclosure would make you walk away?
Reported by candidates at Bain Capital (Credit, New York, 2024). Source: Wall Street Oasis.

Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.

100 questions, mapped to the firms that asked them

Say this

Then walk it

Where candidates lose it

Expect next