Finding Value in a Broken Deal
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.
distressed debt
Profiting From the Remote-Learning Boom
This issue features of one of the largest and best-known online education companies in the world. The bonds declined 75% from their highs as the business stagnated in 2023 but now offer good value. As we detail in the analysis, these are speculative bonds with a meaningful chance of gain, a possibility of bankruptcy, and a real chance of loss.
More Planes, More Profits
The issue will feature a prominent U.S. airline whose bonds trade at a steep discount. It’s a company with nearly 25 years of success and an industry-best customer-service record. Plus, we include an equity that provides some downside protection and lots of upside.
Shopping for the Home… From the Home
In this issue, we’ll examine one of the few solid internet companies that escaped the dot-com carnage. This online merchandiser has a capital efficient business model and almost 10 years of impressive growth, making this bond a bargain at the right price.
Bond Market Stress Declines… For Now
Bank loans are becoming harder to obtain. Meanwhile, credit ratings on corporate bond issuers are improving. The freight train represented by credit tightening is hurtling down the track, but it hasn’t arrived at the station yet.
Moody’s Shows “Hidden” Defaults on the Rise
As escalating default and bankruptcy rates make bond investors increasingly risk-averse, we can expect to see a growing number of basically sound companies’ bonds trading at depressed prices. And that means opportunities for distressed debt investors will increase materially over the next year.
Defaults Triple – But Market Thinks They Won’t Stay This High.
Most investors believe the Fed is done or nearly done with its inflation-fighting interest rate hikes – and so far, no recession is in sight. That means perceived risk will remain subdued in the high yield bond sector… for now.
A Grounded Travel Company Prepares for Takeoff
The bond we’ll introduce today is trading at a 16% discount to par. The parent company was extremely profitable until the pandemic derailed its business. Now, three years removed from the pandemic, the company is turning a corner and on its way to becoming extremely profitable once again.
Portfolio Update: Corporate Bankruptcies Reach Financial-Crisis Levels
Corporate bankruptcies are running at their highest rate since 2010, the year after the Great Recession. As defaults rise, investors will likely become more cautious about taking credit risk and it should become easier to find attractive values in lower-quality bonds.
Welcome to the Planet of the APEs
The company we’ll introduce today is deeply distressed… a formerly solid business on the ropes through no fault of its own. The risks are high, but the profits will likely be higher.