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.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 45
- Firms
- 26
- Updated
- September 2026
031How do you determine whether a company is good for credit investing, quantitatively and qualitatively?TD SecuritiesCredit · New York · 2026
Say this
Quantitatively, I want to know whether the cash flow covers the debt through a downturn, not just today — leverage, coverage, free cash flow conversion and the maturity wall. Qualitatively, I want to know whether the business is durable and whether management and the owner will behave. The qualitative side is what actually distinguishes credits at similar leverage.
Then walk it
- The quantitative core: net debt to EBITDA, EBITDA to interest, free cash flow to debt, and the maturity schedule against available liquidity. Then the same four in a stress case — revenue down 20 percent, margin down 300 basis points — because credit is downside analysis.
- Cash conversion matters more than the EBITDA multiple. Two businesses at 4 times leverage, one converting 70 percent of EBITDA to free cash flow and one converting 20 percent because of working capital and capex, are not the same credit.
- Then asset coverage and recovery: what is the collateral, what would it fetch in a liquidation or a going-concern sale, and where does my claim sit relative to secured debt and structurally senior subsidiary obligations.
- The qualitative half starts with business durability: contracted or recurring revenue, switching costs, pricing power, customer concentration, and whether demand is cyclical or secularly declining. A structurally declining business at 3 times leverage can be a worse credit than a growing one at 5.
- Then the people and the owner. Financial policy, track record through the last downturn, willingness to support the business with equity, and for a sponsor-owned company its history on aggressive liability management. Whether your lender group has been primed before is genuinely predictive.
- And the honest limitation: none of this tells you about idiosyncratic fraud or a regulatory shock. That is what position sizing and diversification are for.
Where candidates lose it
Giving a ratio list and calling the qualitative half 'good management'. Say what you would look at to judge management — leverage track record, behaviour in the last downturn, prior liability management exercises — because that is checkable and 'good management' is not.
Expect next
- What stress case would you run?
- How do you judge financial policy in practice?
- Two companies at the same leverage — what makes one a better credit?
Reported by candidates at TD Securities (Credit, New York, 2026). Source: Wall Street Oasis.
068What do you understand about transaction banking?TD SecuritiesTransaction Banking · New York · 2025
Say this
It is the plumbing business: cash management, payments, liquidity structures, trade finance and working capital solutions for corporate clients. Commercially it is the most valuable franchise a bank has, because it generates fee income and sticky operating deposits — the cheapest funding on the balance sheet — with almost no credit risk.
Then walk it
- Cash management: operating accounts, payments and collections, notional and physical cash pooling across entities and currencies, sweep structures and in-house bank arrangements for multinationals.
- Trade finance: letters of credit, documentary collections, guarantees, export credit agency-backed financing, and supply chain finance where the bank pays a client's suppliers early against the client's credit.
- Working capital: receivables purchase and factoring, inventory finance, and payables financing. These sit right next to DCM because they are alternatives to funded debt, and they can materially change a client's reported net debt.
- Why banks love it: annuity fee income, low capital intensity relative to lending, and the deposits. Operating deposits are treated favourably in the liquidity coverage ratio because they are sticky, so they are far cheaper and more valuable than wholesale funding.
- It is also the stickiest relationship a bank has. Moving your payments infrastructure and ERP integration to another bank takes a year and a project team, so once you are the operating bank you tend to see the lending, the FX and the DCM mandates too.
- Which is the connection to a capital markets seat: the revolver and the cash management mandate are usually decided together, and DCM league table position often follows the lending and transaction banking relationship rather than the other way round.
Where candidates lose it
Dismissing it as back-office plumbing. In an interview for that desk, the winning answer is the commercial one — deposits and fees with low capital usage, and the stickiest client relationship in the bank. Make the link to why it drives the lending and DCM wallet.
Expect next
- Why are operating deposits so valuable to a bank?
- How does supply chain finance affect reported net debt?
- What is the threat from fintech here?
Reported by candidates at TD Securities (Transaction Banking, 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.