Leveraged Finance Interview Technical Questions and Answers Study Guide 2026-04-10 Leveraged Finance Interview Technical Questions and Answers Study Guide.pdf
Leveraged Finance
Interview Technical
Questions and Answers
Study Guide
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Terms in this set (153)
Two options for financing operations and strategic objectives
1. internally generated cash flow
2. external capital provided by third party investors
6 general external sources of capital available
1. Bank Debt
2. Senior Notes
3. Senior Subordinated Notes
4. Convertible Securities
5. Preferred Stock
6. Common Stock
Considerations when evaluating impact of decision to use debt in the capital
structure
1. Achieve highest ROE for existing shareholders
2. Maintaining financial and corporate flexibility
3. Minimizing dilution to existing shareholders and achieving optimal all-in cost
of capital
4. Accessing markets in a timely fashion in order to meet funding requirements
5. Maintaining a sound capital structure to ensure future access to capital
(RFDAC)
Senior Secured Debt
-Typical bank debt (revolving credit facility, term loans) or vendor debt
-May include "second lien" term loans or senior secured notes
Senior Unsecured Notes
-Typical for high yield (and even investment grade) bonds
-Equal ranking in capital structure as Senior Secured Debt, but junior in terms
of allocation of value
-May include cash-pay notes or discount (PIK) notes (as long as "Senior"
Discount Notes)
Senior Subordinated Debt
-(Note: says "Senior" but not included in Senior Debt due to "Subordinated"
provision)
-Typically unsecured high yield bonds
4 Page 4 of 34 Page 4
Leveraged Finance
Interview Technical
Questions and Answers
Study Guide
1 Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Page 1 of 34 Page 1
,Leveraged Finance Interview Technical Questions 2026-04-10 Leveraged Finance Interview Technical Questions.pdf
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,Leveraged Finance Interview Technical Questions 2026-04-10 Leveraged Finance Interview Technical Questions.pdf
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3 Page 3 of 34 Page 3
, Leveraged Finance Interview Technical Questions 2026-04-10 Leveraged Finance Interview Technical Questions.pdf
Terms in this set (153)
Two options for financing operations and strategic objectives
1. internally generated cash flow
2. external capital provided by third party investors
6 general external sources of capital available
1. Bank Debt
2. Senior Notes
3. Senior Subordinated Notes
4. Convertible Securities
5. Preferred Stock
6. Common Stock
Considerations when evaluating impact of decision to use debt in the capital
structure
1. Achieve highest ROE for existing shareholders
2. Maintaining financial and corporate flexibility
3. Minimizing dilution to existing shareholders and achieving optimal all-in cost
of capital
4. Accessing markets in a timely fashion in order to meet funding requirements
5. Maintaining a sound capital structure to ensure future access to capital
(RFDAC)
Senior Secured Debt
-Typical bank debt (revolving credit facility, term loans) or vendor debt
-May include "second lien" term loans or senior secured notes
Senior Unsecured Notes
-Typical for high yield (and even investment grade) bonds
-Equal ranking in capital structure as Senior Secured Debt, but junior in terms
of allocation of value
-May include cash-pay notes or discount (PIK) notes (as long as "Senior"
Discount Notes)
Senior Subordinated Debt
-(Note: says "Senior" but not included in Senior Debt due to "Subordinated"
provision)
-Typically unsecured high yield bonds
4 Page 4 of 34 Page 4
