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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Question bank

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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035What is the difference between credit and equity investments?Credit analysis and ratingsIntermediatetechnicalKKRDistressed Debt · New York · 2025
Say this
Payoff shape. Equity has unlimited upside and you lose everything at zero; credit has capped upside — you get par and your coupon — and real downside. So equity analysis is about how good it can get and credit analysis is about how bad it can get without you being impaired.
Then walk it
1. The asymmetry drives everything else. Your best case as a lender is that you get paid back on time, which you already priced. So the entire analytical effort goes into the downside scenario and the recovery if it happens.
2. That changes what you study. Equity focuses on growth, margin expansion and terminal value. Credit focuses on cash flow adequacy, liquidity, the maturity wall, asset coverage and the documentation.
3. It changes the seat at the table. Debt is a contract, so a lender has rights: covenants, information, consent, and in a default, control. Equity has votes and hope. In distress the creditor is the one who decides.
4. It changes how you size. A credit portfolio needs diversification because one zero cannot be offset by a winner — there are no winners, only par. An equity book can carry concentrated positions because one 10-bagger pays for many failures.
5. For a distressed seat specifically, the two converge. You buy debt at 40 with a view on the reorganised enterprise value, so you are underwriting equity economics through a debt instrument, and the fulcrum security is where the ownership lands.
6. The honest framing to add: both are claims on the same enterprise value. A credit analyst who cannot value the business cannot value the recovery, so good credit work includes the equity work — it just stops caring above the point where you are made whole.
Where candidates lose it
Answering only 'debt is senior and safer'. The concept the interviewer wants is the asymmetric payoff and the shift from upside to downside analysis. For a distressed seat, add that the two converge and name the fulcrum security.
Expect next
- So what is the fulcrum security?
- How does that change position sizing?
- Would you rather own the debt or the equity of a company you think doubles?
Reported by candidates at KKR (Distressed Debt, New York, 2025). 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