Debt Capital Markets interview preparation

Questions

100

Traced to a firm

45

Firms

26

Updated

September 2026

Asked at

All firmsTSTruist Securities5PIMCO4TD Securities4Apollo Global Management3Nomura3Scotiabank3Bain Capital2Houlihan Lokey2Mizuho2Neuberger Berman2Oaktree Capital Management2RCRBC Capital Markets2Carlyle Group1Deutsche Bank1Golub Capital1HPS Investment Partners1Invesco1KKR1Lazard1Moelis & Company1Moody's1Northern Trust1NUNuveen1Rothschild & 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

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1. 032How would you assess whether someone is a good borrower?Credit analysis and ratingsIntermediatetechnicalWells Fargo SecuritiesGeneralist · North Carolina · 2025

   Say this

   I would use the old framework because it still works: character, capacity, capital, collateral and conditions. Capacity and collateral do most of the work, but character — the borrower's track record and willingness to pay — is what banks actually lose money on.

   Then walk it

   1. Capacity: can the cash flow service the debt through a cycle. Interest coverage, fixed charge coverage including leases and amortisation, and the same under stress. This is the quantitative heart of it.
   2. Capital: how much of their own money is in it. A sponsor with 40 percent equity behind your loan has a strong incentive to defend the business; one with 10 percent has an option.
   3. Collateral: what secures you and what it is worth in a downside, not at book. Receivables and inventory are worth a discount to book; specialised machinery is worth very little to anyone else.
   4. Conditions: the industry cycle, the regulatory environment, and what the money is for. Funding a contracted expansion is a different risk from funding a dividend recap.
   5. Character is the one people skip and it is where losses come from. Payment history, transparency with lenders, whether they have amended and extended quietly or surprised their banks, and whether they have moved collateral in a previous restructuring.
   6. Then the banker's addition: structure can fix a marginal borrower. Tighter covenants, amortisation, cash sweeps, security, a guarantee from the parent. The question is rarely a flat yes or no; it is 'yes at what price and on what terms'.

   Where candidates lose it

   Reciting the five Cs like a flashcard with no content under each. Interviewers in corporate banking use this framework daily and can tell instantly. Put one concrete test under each letter, and end on the banker's point that structure prices marginal credits.

   Expect next

   • How would you structure around a weak borrower?
   • What would you do if capacity is fine but character is questionable?
   • How much equity would you want behind you?

   Reported by candidates at Wells Fargo Securities (Generalist, North Carolina, 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.