Companies that are usually going through bankruptcy or reorganization. Managers buy these companies at bargain prices and resell if the company recovers.
managers invest in the equity or debt securities of companies that are in or facing a bankruptcy, reorganization, or other distressed situation. The investor hopes to purchase these securities at low, or distressed prices with the hope that these securities will appreciate when the company emerges from the distressed situation
A type of event-driven hedge fund investment strategy. Fund managers invest in the debt, equity or trade claims of companies in financial distress and generally bankruptcy. The securities of these companies typically trade at substantial discounts to par value. This attracts investors looking to exploit possible pricing inefficiencies should a turn-around materialise.
An investment strategy focused on buying the equity or debt of companies that are troubled, restructuring or facing bankruptcy. The manager hopes to buy a company's securities at a low price and that the securities will appreciate in value.
An investment in the debt and/or equity of companies having financial difficulty. Such companies are generally in bankruptcy reorganization, emerging from bankruptcy, or appear likely to declare bankruptcy in the near future. Because of their distressed situations, an investment manager can buy such companies' securities at deeply discounted prices. The manager stands to make money on such a position, should the company successfully reorganize and return to profitability. Also, the manager could realize a profit if the company is liquidated, provided that the manager had bought senior debt in the company for less than its liquidation value.
Refer to issues in bankruptcy or other severely impaired securities which have very low credit ratings.
Distressed securities are stocks, bonds, and trade or financial claims of companies in, or about to enter or exit, bankruptcy or financial distress. The prices of these securities fall in anticipation of the financial distress when their holders choose to sell rather than remain invested in a financially troubled company. In cases like these, investment professionals who specialize in researching distressed securities buy these securities (or claims on them) at discounted prices.
A term referring to the shares, bonds, trade debt etc. of companies that are troubled or may be in the process of restructuring, or have filed for bankruptcy protection.
Distressed-securities funds buy debt, equity or "trade claims" of companies that are bankrupt or otherwise in financial trouble. Until these firms are restructured or other remedial action has been taken, their securities often trade significantly below par value and attract distressed securities managers anxious to benefit from a turn-around they expect can be realized.
Distressed securities are securities of companies that are either already in default, under bankruptcy protection, or in distress and heading toward such a condition. The most common distressed securities are bonds and bank debt. While there is no precise definition, fixed income instruments with a Yield to Maturity in excess of 600 basis points over the riskless rate of return (e.g.
