3 questions reported in Blue Owl Capital interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
Questions
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Hard
Model builds
Built in the spreadsheet grid
Blended return construction, PIK, warrants and intercreditor terms. 3 questions
A process question for junior private credit analysts.
Walk me through the basic diligence you would do before committing to a mezzanine investment.
Mezzanine teams use this arithmetic to check whether reported leverage captures debt that is compounding rather than being paid in cash.
A borrower has $180m of first-lien debt and a $60m mezzanine note with a 10% annual PIK coupon. EBITDA is $40m and does not change. What are total debt and total leverage after one year, assuming no…
Tests whether candidates know how junior lenders monitor risk without controlling the company day to day.
What covenants would you want in a mezzanine investment and why?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
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