Session 13 | Reading 36 | LOS u    

7 cards

LO u: Discuss the sources of distressed securities and explain the major strategies for investing in them.


 
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Created Mar 10, 2011
by
lutfallah

 

 
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1
Long-only value investing tries to
 
find opportunities where the prospects will improve tries to find them before other investors...
2
High-yield investing is
 
buying publicly-traded, below investment grade debt. 
3
Orphan equities investing is 
 
the purchase of the equities of firms emerging from reorganization.
4
Distressed debt arbitrage is 
 
the purchasing of a company’s distressed debt while short selling the company’s equity. 
5
The investment can earn a return in two ways: 
 
(1) If the firm’s condition declines, the debt and equity will both fall in value, but...
6
Private equity is an "active" approach where the investor 
 
acquires positions in the distressed company, and the investment gives some measure of...
7
The investor can then 
 
influence the company as well as acquire more ownership in the process of any reorganization.

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