36 questions reported in Oaktree 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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Structuring for downside, collateral, priming risk and recovery. 15 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 foundational distressed-investing concept used in recovery and control discussions.
What is the fulcrum security in a restructuring, and why do distressed investors care about it?
Tests whether a candidate separates the face amount of a claim from its economic value.
You buy $100m face value of first-lien debt at 65. What does "at 65" mean, and what determines whether the trade is attractive?
A first-round distressed-credit question testing whether a candidate understands why secured creditors can permit a Chapter 11 process without surrendering economic value.
What is adequate protection in Chapter 11, and why does a debtor need to provide it to a secured lender?
A first-round question testing whether a candidate understands the mandate beyond generic private credit.
What does a special situations investor do, and how is the underwriting different from a normal direct loan?
The standard liquidity question in a turnaround or stressed-lending process.
Why do distressed investors focus on a 13-week cash-flow forecast, and what would you challenge in one?
A realistic workflow question when a stressed borrower offers material non-public information to a lender group before an out-of-court restructuring.
You own a meaningful position in a stressed term loan. The company's adviser asks you to join a creditor group and sign an NDA to receive a restructuring proposal. What do you assess before signing,…
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?
The core quantitative exercise in distressed credit.
A company has $400m first lien, $250m second lien and $300m unsecured notes. Normalised EBITDA is $120m and comparable businesses trade at 5.5x. Calculate recoveries and identify the fulcrum security.
A senior distressed-credit case that combines recovery analysis, process strategy and ownership underwriting.
You own $120m of first-lien debt and the company is being sold in bankruptcy. Explain a credit bid and how you would decide whether to use one.
Special situations and distressed funds compete to provide it.
Why is debtor-in-possession financing attractive to a lender, and why would an existing creditor provide it even at a loss-making rate?
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?
Tests process judgement in a restructuring where speed and stakeholder consent change value.
Compare a prepackaged Chapter 11 with a free-fall filing. When would you favour each, and what does the choice mean for creditors?
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?
A senior special-situations case on valuing a legacy first-lien position after a non-pro-rata transaction has created a new superpriority tranche.
A company has $400m of legacy first-lien debt. A majority group exchanges into $100m of new superpriority debt and provides $25m of cash, leaving non-participating legacy lenders structurally behind…
Leverage capacity, documentation, downside cases and portfolio construction. 5 questions
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?
A credit-committee scenario requiring an explicit recommendation, not a list of factors.
Choose one loan. Loan A pays SOFR + 700bp, is second lien at 5.0x total leverage, and has 1.5x EBITDA of equity cushion. Loan B pays SOFR + 525bp, is first lien at 4.0x total leverage, and has 3.0x…
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?
Deal break risk, spread maths, regulatory timelines and downside to unaffected. 4 questions
Event-driven funds test whether candidates can translate enterprise value into class-specific recovery before discussing a distressed catalyst.
A bankrupt company is worth $180m after restructuring costs. It has a $40m revolver, $100m first-lien term loan and $80m unsecured notes. Ignoring interest and fees, calculate each class's recovery…
Special-situations funds use rights offerings to test dilution maths and capital-structure judgement.
A company offers one right for every four shares owned; five rights buy one new share at $10. The stock trades at $14 before the rights detach. What happens to value, and what would you investigate?
A classic structural inefficiency that event-driven funds return to repeatedly.
A company emerges from Chapter 11 and its new equity begins trading. Why is this often mispriced, and what do you analyse?
A senior event-driven credit discussion testing whether you can analyse a liability-management transaction from both tendering and holdout perspectives.
An issuer offers unsecured bondholders $70 of new secured notes for every $100 principal tendered. If at least 90% tender, non-tendering bonds will be structurally subordinated and you estimate their…
Liquidity runway, fulcrum security, Chapter 11 mechanics and recoveries. 3 questions
A core concept tested across restructuring and distressed-investing interviews.
What is the fulcrum security in a restructuring?
Tests capital-structure mechanics in a consensual restructuring case.
Why would creditors agree to exchange debt for equity, and what determines the ownership split?
Core technical for restructuring groups and distressed funds.
Walk me through a Chapter 11 process, and explain what a debtor actually gains by filing.
Spread decomposition, liquidity, index arbitrage and dealer inventory. 3 questions
This is a foundational recovery question in credit sales, trading and research interviews.
A company has a first-lien loan, unsecured bonds, and common equity. Rank them in a restructuring and explain why the ranking matters even when the company is current on interest.
The two halves of the leveraged credit market behave differently, and desks trade both.
Compare leveraged loans and high yield bonds as investments. Which would you rather own if you expect rates to fall?
Relative-value credit interviews test whether candidates can combine documents, recovery analysis and market pricing into a trade.
A company's first-lien term loan trades at 92 and its unsecured bond trades at 78. Both mature in three years. Under a downside case, you estimate enterprise value of 85 for every 100 of first-lien…
Recovery analysis, capital structure relative value and covenant leakage. 2 questions
Credit hedge fund interviews test whether you can think across the whole structure.
A company's bonds trade at 70 cents while the equity still has a $2bn market cap. Is there a trade? Walk me through the analysis.
Credit funds test whether you can compare instruments rather than just analyse a company.
A company's secured bonds yield 8% and its unsecured bonds yield 14%. Is the unsecured cheap? Walk me through the analysis.
LBO modelling, leverage capacity, value creation plans and exit paths. 2 questions
Leveraged finance and private credit interviews go deep here.
Explain the difference between maintenance and incurrence covenants. What does "covenant-lite" mean, and why should a lender care?
Core to restructuring, special situations and distressed credit interviews.
What is the fulcrum security? Walk me through how you'd identify it, and explain the loan-to-own strategy.
LTV, DSCR, debt yield and structuring against a property's cash flow. 1 question
A real estate debt investment-committee case on whether time creates recovery value or merely delays loss.
A $90m bridge loan matures today. A consensual 12-month extension requires a $5m sponsor paydown and is expected to produce $92m of net recovery next year. Immediate enforcement is expected to produce…
Duration, curve trades, auctions, basis and central bank reaction. 1 question
Credit trading and research interviews start here.
Define a credit spread. What components does it compensate for, and why do spreads historically exceed what realised default losses would justify?
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 Oaktree.