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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067What are the primary categories of collateral securing an asset-based loan, and what are the nuances for each?Syndication and loansHardtechnicalTruist SecuritiesAsset Finance · Atlanta · 2023
Say this
Four main categories: accounts receivable, inventory, machinery and equipment, and real estate. Each gets an advance rate in the borrowing base, and the nuance is in the eligibility criteria and the dilution reserves, because that is where the actual availability is won or lost.
Then walk it
1. Receivables: the best collateral, typically 85 percent advance rate. But only eligible receivables count — under 90 days, not from an affiliate, not cross-aged, not from a concentrated or foreign or government obligor. Then you take dilution reserves for credit notes, returns and discounts. A 15 percent dilution rate can cut effective availability far below the headline rate.
2. Inventory: typically 50 to 65 percent of cost, or an advance rate against net orderly liquidation value from a third-party appraiser. Raw materials and finished goods are worth more than work in progress, which is often worth nothing. Perishable, fashion-dated and bespoke inventory gets haircut hard, and consignment or landed-in-transit inventory has title issues.
3. Machinery and equipment: advance rate against a forced-liquidation appraisal, often 70 to 80 percent of that value, which itself may be a fraction of book. Generic assets with a resale market — trucks, standard CNC machines — hold value; purpose-built process equipment does not.
4. Real estate: often 50 to 65 percent of appraised value, amortising, and slow to realise. Environmental liability is the specific nuance, because a contaminated site can be worth less than zero to a lender who takes title.
5. Cross-cutting nuances that matter more than the advance rates: perfection of the security interest, priority against purchase money security interests and landlord or warehouseman liens, the ability to control the cash through a dominion of funds arrangement, and field examinations plus appraisals at least annually.
6. A worked number: 100 of gross receivables with 10 ineligible and 10 percent dilution reserve gives roughly 90 eligible less 9 reserve, so 81, times an 85 percent advance rate equals about 69 of availability. The headline 85 percent became an effective 69 percent.
Where candidates lose it
Quoting advance rates with no eligibility or dilution discussion. Availability is set by the eligibility criteria and the reserves, not by the headline percentages, and any ABL lender will test that. Also, do not forget the field exam and appraisal cadence — ABL is a monitoring business.
Expect next
- How would you size availability on 100 of gross receivables?
- What is a springing fixed charge coverage test?
- Which inventory would you refuse to lend against?
Reported by candidates at Truist Securities (Asset Finance, Atlanta, 2023). 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

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Then walk it

Where candidates lose it

Expect next