BIWS 400 Questions - All Technicals Exam Questions and Answers
Grade A+
You've never worked in finance before. How much do you know about what
bankers actually do? - Answer-I've done a lot of research on my own.
Based on that, I know that bankers advise companies on transactions - buying and
selling other companies, and raising capital. They are "agents" that connect a
company with the appropriate buyer, seller, or investor.
The day-to-day work involves creating presentations, financial analysis and
marketing materials such as Executive Summaries.
Let's say I'm working on an IPO for a client. Can you describe briefly what I would
do? - Answer-You meet with the client and gather basic information - such as their
financial details, an industry overview, and who their customers are. You meet with
other bankers and the lawyers to draft the S-1 registration statement - which
describes the company's business and markets it to investors. You receive some
comments from the SEC and keep revising the document until it's acceptable. You
spend a few weeks going on a "road show" where you present the company to
institutional investors and convince them to invest. The company begins trading on
an exchange once you've raised the capital from investors.
,How much do you know about the lifestyle in this industry? Do you know how
many hours you're going to work each week? - Answer-I've done my homework
and I understand it's going to be an 80-100 hour per week job but I'm not afraid of
that.
Can you tell me about the different product and industry groups at our bank? -
Answer-Being a bulge bracket bank, Credit Suisse offers pretty much anything a
client could ask for. Restructuring, M&A, LevFin, Debt and Equity Capital
Markets. Some specific groups - Financial Sponsors, ECMS, DCMS, Ultra High
Net Worth (UHNW). Some specific industries - healthcare, industrials (my
previous interviewer), financial institutions, etc.
What's in a pitch book? - Answer-It depends.
1. Bank "credentials" (similar deals they've done to "prove" their expertise).
2. Summary of a company's options ("strategic alternatives" in banker-speak).
3. Valuation and appropriate financial models (for example, if you're pitching for
an IPO you might show where the IPO proceeds would go).
4. Potential acquisition targets (buy-side M&A deal) or potential buyers (sell-side
M&A deal). This is not applicable for equity/debt deals.
5. Summary and key recommendations.
,How do companies select the bankers they work with? - Answer-Usually based on
relationships. When it comes time to do a deal, the company calls different banks it
has spoken with and asks them to "pitch" for the business. This is called a "bake-
off" and the company selects the "winner" afterward
Walk me through the process of a typical sell-side M&A deal. - Answer-1. Meet
with company, create initial marketing materials like the Executive Summary and
Offering Memorandum (OM), and decide on potential buyers.
2. Send out Executive Summary to potential buyers to gauge interest.
3. Send NDAs (Non-Disclosure Agreements) to interested buyers along with more
detailed information like the Offering Memorandum, and respond to any follow-up
due diligence requests from the buyers.
4. Set a "bid deadline" and solicit written Indications of Interest (IOIs) from
buyers.
5. Select which buyers advance to the next round.
6. Continue responding to information requests and setting up due diligence
meetings between the company and potential buyers.
7. Set another bid deadline and pick the "winner."
, 8. Negotiate terms of the Purchase Agreement with the winner and announce the
deal.
Walk me through the process of a typical buy-side M&A deal. - Answer-1. Spend a
lot of time upfront doing research on dozens or hundreds of potential acquisition
targets, and go through multiple cycles of selection and filtering with the company
you're representing.
2. Narrow down the list based on their feedback and decide which ones to
approach.
3. Conduct meetings and gauge the receptivity of each potential seller.
4. As discussions with the most likely seller become more serious, conduct more
in-depth due diligence and figure out your offer price.
5. Negotiate the price and key terms of the Purchase Agreement and then announce
the transaction.
Walk me through a debt issuance deal. - Answer-1. Meet with the client and gather
basic financial, industry, and customer information.
2. Work closely with DCM / Leveraged Finance to develop a debt financing or
LBO model for the company and figure out what kind of leverage, coverage ratios,
and covenants might be appropriate.
Grade A+
You've never worked in finance before. How much do you know about what
bankers actually do? - Answer-I've done a lot of research on my own.
Based on that, I know that bankers advise companies on transactions - buying and
selling other companies, and raising capital. They are "agents" that connect a
company with the appropriate buyer, seller, or investor.
The day-to-day work involves creating presentations, financial analysis and
marketing materials such as Executive Summaries.
Let's say I'm working on an IPO for a client. Can you describe briefly what I would
do? - Answer-You meet with the client and gather basic information - such as their
financial details, an industry overview, and who their customers are. You meet with
other bankers and the lawyers to draft the S-1 registration statement - which
describes the company's business and markets it to investors. You receive some
comments from the SEC and keep revising the document until it's acceptable. You
spend a few weeks going on a "road show" where you present the company to
institutional investors and convince them to invest. The company begins trading on
an exchange once you've raised the capital from investors.
,How much do you know about the lifestyle in this industry? Do you know how
many hours you're going to work each week? - Answer-I've done my homework
and I understand it's going to be an 80-100 hour per week job but I'm not afraid of
that.
Can you tell me about the different product and industry groups at our bank? -
Answer-Being a bulge bracket bank, Credit Suisse offers pretty much anything a
client could ask for. Restructuring, M&A, LevFin, Debt and Equity Capital
Markets. Some specific groups - Financial Sponsors, ECMS, DCMS, Ultra High
Net Worth (UHNW). Some specific industries - healthcare, industrials (my
previous interviewer), financial institutions, etc.
What's in a pitch book? - Answer-It depends.
1. Bank "credentials" (similar deals they've done to "prove" their expertise).
2. Summary of a company's options ("strategic alternatives" in banker-speak).
3. Valuation and appropriate financial models (for example, if you're pitching for
an IPO you might show where the IPO proceeds would go).
4. Potential acquisition targets (buy-side M&A deal) or potential buyers (sell-side
M&A deal). This is not applicable for equity/debt deals.
5. Summary and key recommendations.
,How do companies select the bankers they work with? - Answer-Usually based on
relationships. When it comes time to do a deal, the company calls different banks it
has spoken with and asks them to "pitch" for the business. This is called a "bake-
off" and the company selects the "winner" afterward
Walk me through the process of a typical sell-side M&A deal. - Answer-1. Meet
with company, create initial marketing materials like the Executive Summary and
Offering Memorandum (OM), and decide on potential buyers.
2. Send out Executive Summary to potential buyers to gauge interest.
3. Send NDAs (Non-Disclosure Agreements) to interested buyers along with more
detailed information like the Offering Memorandum, and respond to any follow-up
due diligence requests from the buyers.
4. Set a "bid deadline" and solicit written Indications of Interest (IOIs) from
buyers.
5. Select which buyers advance to the next round.
6. Continue responding to information requests and setting up due diligence
meetings between the company and potential buyers.
7. Set another bid deadline and pick the "winner."
, 8. Negotiate terms of the Purchase Agreement with the winner and announce the
deal.
Walk me through the process of a typical buy-side M&A deal. - Answer-1. Spend a
lot of time upfront doing research on dozens or hundreds of potential acquisition
targets, and go through multiple cycles of selection and filtering with the company
you're representing.
2. Narrow down the list based on their feedback and decide which ones to
approach.
3. Conduct meetings and gauge the receptivity of each potential seller.
4. As discussions with the most likely seller become more serious, conduct more
in-depth due diligence and figure out your offer price.
5. Negotiate the price and key terms of the Purchase Agreement and then announce
the transaction.
Walk me through a debt issuance deal. - Answer-1. Meet with the client and gather
basic financial, industry, and customer information.
2. Work closely with DCM / Leveraged Finance to develop a debt financing or
LBO model for the company and figure out what kind of leverage, coverage ratios,
and covenants might be appropriate.
