Credit Fundamentals
Financials & Equations
Distressed Credit
Bankruptcy & Restructuring
Super Hard
100

What are the three types of covenants?

  1. Affirmative (Positive)

  2. Negative

  3. Financial

    1. Maintainence

    2. Incurrence

100

How do you calculate YTM? (Hint: What is the formula?)

  1. PV = coupon * (1-((1/(1+r))^n)/n) + FV/((1+r)^n)

100

What are the three types of MAIF Special Situation Opportunities?

  1. Event Driven

  2. Pre-/Post- Bankruptcy

  3. Dying Industry

100

What are the three types of Ch. 11 bankruptcy?

  1. Pre-Pack

  2. Pre-Arranged

  3. Freefall

100

What was Joey’s SAT score?

920


200

Name and explain three bond options.

  1. Call 

  2. Put 

  3. Equity Clawback 

  4. Convertible

  5. Extendable

200

Conceptually explain what a bond spread is.

  1. Difference in yield between corporate bond and comparable treasury.

200

Who is Michael Milken and what is he known for?

Known as the "junk bond king" in the 1980s and is credited with the creation of the junk bond/HY market.
Worked at Drexel Burnham & Lambert and was eventually arrested for insider trading.

200

What are the three primary restructuring courts?

  1. Delaware

  2. Southern District of New York

  3. Southern District of Texas

200

Name a company that wasn’t listed in credit camp that is distressed.

N/A.

300

What is duration and convexity?

  1. Duration is a measure that can be used to describe a given bond’s sensitivity to changes in interest rates

  2. Convexity is a measurement of how duration changes as yields change (therefore price sensitivity)

300

What's the difference between the face value and the market value of a bond?

The face value is the amount outstanding and the market value reflects the price the debt is trading at.

300

What is the rating cutoff between IG, HY, and distressed debt?

  1. IG: AAA - BBB- / Aaa - Baa3

  2. HY: BB+ / Ba3 and below

  3. Distressed: Gray Area, but typically B- / B3 and below

300

What is the difference between Ch. 7 and Ch. 11 Bankruptcy?

  1. Ch. 7: Liquidation

  2. Ch. 11: Reorganization

300

Will John ever persuade a sophomore to get a job in restructuring?

No.

400

Name 5 different types of loans and bonds.
Addtl. Which is the second highest in priority?

N/A.

400

If you have two bonds: Bond A with a maturity in 5 years, Bond B with a maturity in 4 years. Which has a higher duration?

Bond A

400

Explain a few factors that go into a bonds trading price.

1. Interest Rates

2. Credit Quality

3. Inflation

4. Supply/Demand in the market

5. Information

400

What are the three types of LMEs?

  1. Drop down

  2. Non-Pro Rata Uptier

  3. Double Dip

400

How many girls did Adam, Joey, and John fumble in Fiddlesticks on the night of July 18th, 2025?

Around 14

500

Name and explain each of the spreads.

  1. G-Spread

  2. T-Spread

  3. Z-Spread

  4. Option-Adjusted Spread

500

Let’s say we have a bond maturing in 5 years with a 5% S/A coupon currently trading at $80 and returning par. Roughly, how much should the YTM be?

16.5%

500

Last fall, we pitched MPLN’s 2027 Unsecured Convertible PIK Notes. What is a PIK toggle? A PIK Note is comprised of two interest rates? Explain both.

  1. PIK toggle gives the issuer the option to defer cash payments of interest by paying interest “in kind,” or in the form of additional bonds

  2. Cash-pay vs. PIK

500

Explain conceptually what the detachment and attachment points are.


  • Attachment Point: This is the percentage of total losses that a specific tranche of a structured credit product is exposed to. If the cumulative collateral loss exceeds this point, the tranche incurs losses.
  • Detachment Point: This refers to the percentage of total losses that a junior tranche (mezzanine) is exposed to. It serves as the boundary between senior and junior tranches in a structured credit product.
500

Who showed up to every meeting? (Hint: It is not Brandon)

Benjamin Yawoga, Max Stallings, & Adam Mogawer

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