How to Invest in a Distressed Company

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I'm highly skeptical about investing too much in companies that both have interest coverage less than one and for long periods of time look like a failing company. I think distressed industry, I prefer a strategy where the company is not yet looking like a bank book company, but is in distress for whatever reason. That I think is a better strategy because then you get the best of potentially both worlds. If it doesn't go bankrupt, you get the higher yield plus the capital appreciation. And if it does go bankrupt and you're in a position to change around the management and the asset structure as well as the capital structure and do it effectively, then you might want to double down and buy the debt again

In this week’s Primary View podcast, Dr. Edward Altman, the legendary bankruptcy expert, discusses the outlook for debt-saddled zombie companies with Reorg reporter Gaurav Sharma. The New York University professor, best known for the Z-Score formula, cautions that bankruptcy cases are likely to increase in 2024-25, even if the U.S. avoids a recession. If you are not a Reorg subscriber, request access here: go.reorg-research.com/Podcast-Trial We're looking for feedback to improve the podcast experience! Please share your thoughts here: www.research.net/r/Reorg_podcast_survey For more information on our latest events and webinars: reorg.com/resources/events-and-webinars/ Sign up to our weekly newsletter Reorg on the Record: reorg.com/resources/reorg-on-the-record/ #leveragedfinance #highyield #restructuring #performingcredit #distresseddebt #debtrestructuring #leveragedloans