23. Distressed Credits, Bankruptcy, and Distressed Exchanges
What’s in this chapter:
• Examining liquidity in distressed credits
• Why bankruptcy analysis matters, even if a company is not filing bankruptcy
• How to look at rankings, claims, and subordination of claims
• The impact of valuation on bankruptcy and restructuring
• How companies restructure without bankruptcy
Companies sometimes get into financial trouble, and this can lead to default. This is more common for below-investment-grade companies than for investment-grade companies. However, the risk of default is part of the reason why yields are higher on leveraged debt instruments. Many studies show that over the long term, across a diverse portfolio, investors are actually more than ...