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
Asked at
All firmsTruist Securities5PIMCO4TD Securities4Apollo Global Management3Nomura3Scotiabank3Bain Capital2Houlihan Lokey2Mizuho2Neuberger Berman2Oaktree Capital Management2RBC Capital Markets2Carlyle Group1Deutsche Bank1Golub Capital1HPS Investment Partners1Invesco1KKR1Lazard1Moelis & Company1Moody's1Northern Trust1Nuveen1Rothschild & Co1S&P Global1Wells Fargo Securities1
Topic
All topicsBond mechanics11Duration and convexity6Yield curve and rates5Credit spreads5Credit analysis and ratings13Credit modelling9Primary issuance9Syndication and loans10Structured credit7Covenants and documentation5Liability management5Indian debt markets7Fit8
Level
AnyCoreIntermediateHard
Type
AnyTechnicalBrainteaserMarket viewCaseFit
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  1. 042How does depreciation flow through the financial statements?Credit modellingCorephone / first roundOaktree Capital ManagementDebt Capital Markets · New York · 2026

    Say this

    Take 100 of depreciation at a 25 percent tax rate. Pre-tax income falls 100, tax falls 25, so net income falls 75. Cash actually rises 25, because depreciation is non-cash and the only real effect is the tax you no longer pay.

    Then walk it

    1. Income statement: 100 of depreciation reduces EBIT by 100, so pre-tax income is down 100 and net income is down 75.
    2. Cash flow statement: start from net income at minus 75, add back the 100 of non-cash depreciation, so cash from operations is up 25.
    3. Balance sheet: cash up 25, net PP&E down 100, so assets down 75. Retained earnings down 75. It balances.
    4. The point is the depreciation tax shield. A non-cash charge of 100 generated 25 of real cash, which is why capital-intensive businesses have effective tax rates below the statutory one.
    5. For a credit analyst there is a second point: EBITDA adds depreciation straight back, so it is unaffected. Which is exactly why EBITDA flatters capital-intensive borrowers — the asset is still wearing out and will need replacing with real cash capex.
    6. So when I see high depreciation I immediately compare it to capex. Capex persistently below depreciation means the business is under-investing and the cash flow is borrowed from the future.

    Where candidates lose it

    Saying cash falls. It does not — depreciation is non-cash and the only cash effect is the tax saving. In a credit interview, also make the EBITDA point: adding D&A back is why EBITDA overstates the cash a capital-intensive borrower really has.

    Expect next

    • Now do 100 of capex instead.
    • What if the company has no taxable income?
    • Why is EBITDA a poor proxy for cash flow in a capital-intensive business?

    Reported by candidates at Oaktree Capital Management (Debt Capital Markets, New York, 2026). 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.