12 questions reported in HPS interviews, organised by the group that asks them. Every question carries a model answer and graded feedback on your own attempt.
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Leverage capacity, documentation, downside cases and portfolio construction. 7 questions
A screening calculation used before any deeper credit discussion.
A borrower has $60m of debt, $10m of cash and $12m of EBITDA. Calculate gross and net leverage. Why might both figures mislead a lender?
Tests whether you think about the fund, not just the individual credit.
You're building a $2bn direct lending fund. How many positions, how do you diversify, and what returns should LPs expect?
A practical underwriting follow-up after management presents adjusted EBITDA.
Management reports $20m of adjusted EBITDA, including $3m of restructuring costs and $2m of projected synergies from an acquisition that has not closed. How would you decide what EBITDA to underwrite?
The situation every private credit portfolio faces, and where returns are actually determined.
A portfolio company breaches its leverage covenant. The sponsor asks for an amendment. How do you respond?
An offer-level judgement question about incentives during a stressed portfolio-company situation.
A sponsor-backed borrower needs $15m of liquidity. The sponsor says it has reserves but wants lenders to fund a super-senior delayed-draw tranche first. How would you evaluate the request?
Private credit interviews go deep on documentation, because that is where the risk lives.
Beyond the leverage covenant, which credit agreement terms do you negotiate hardest, and why?
The core analytical exercise of a private credit investment team.
You're underwriting a $300m unitranche to a sponsor-backed software business at 6.0x leverage. What is your analysis, and what protections do you negotiate?
Structuring for downside, collateral, priming risk and recovery. 5 questions
Common in stressed-credit interviews because it tests how lenders create time without giving away rights.
A borrower will breach a leverage covenant next quarter but needs six months to sell a division. What is the difference between a waiver and a forbearance agreement, and which would you prefer as…
A second-round documentation question for investors buying junior or structurally complex debt.
You are considering a second-lien loan. What intercreditor provisions can matter more than the stated interest rate?
Tests whether a candidate can translate a liquidity gap into protected new-money terms.
A company needs $40m to fund operations through a turnaround. What terms would you seek if you provide rescue financing?
The defining development in leveraged credit over the last decade.
Explain the main liability management exercises. How does a lender end up worse off despite holding senior secured debt?
Special situations interviews test structuring creativity against downside protection.
A company needs $150m urgently and cannot access conventional markets. How would you structure the financing, and how do you get comfortable?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Company tags reflect where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with HPS.