The distressed-bond universe exhibits a rare market condition that in the past has produced an average annual return of 73%. On the face of it, as we discuss in this issue, this condition could prove to be an excellent time to be buying distressed debt.
Non-bank direct lenders, which normally concentrate on small-to-medium enterprises, are now playing in the big leagues. A big question is whether these non-traditional lenders will continue to keep a lid on defaults when the U.S. economy eventually hits a rough patch.
Non-bank direct lenders, which normally concentrate on small-to-medium enterprises, are now playing in the big leagues. A big question is whether these non-traditional lenders will continue to keep a lid on defaults when the U.S. economy eventually hits a rough patch.
In this issue, we recommend the stock and bond of a company that has moved itself from a financially precarious position to a secure one… but the market doesn’t yet appreciate this new reality.
Non-bank direct lenders, which normally concentrate on small-to-medium enterprises, are now playing in the big leagues. A big question is whether these non-traditional lenders will continue to keep a lid on defaults when the U.S. economy eventually hits a rough patch.
Owing to an oversupply of office space, the bond price of this commercial real estate company has declined as if a bankruptcy is likely. In this issue, we will show you why we think the bonds are worth more than that – possibly much more.
Because distressed-debt investing can be risky, this month’s update focuses on proper position sizing within a portfolio, plus some recommendations for investors new to this sector.
We have found one bond among more than a dozen issued by these two newly merged companies that we consider well very protected from the financial perils that the new company might experience. And because of this, it has an extra high yield, which can lead to extra high profits.
Right now the bond market is not sending very many distress signals. But if the mood shifts, we could suddenly have many more bonds trading at yields that make them appealing to investors with the appetite for high risk/high reward.
In the midst of the market tumult and a broken merger, this company’s bonds felt a sharp decline in price. For analyst Martin Fridson this distress has created a very appealing new opportunity.