Definition: Distressed debt refers to securities issued by companies or entities facing financial distress or undergoing restructuring. These debt securities are typically traded at a significant discount to their face value due to the increased risk associated with the issuer’s financial situation. Distressed debt can include bonds, loans, or other debt instruments.
Example: If a company is on the verge of bankruptcy or has already filed for bankruptcy, its outstanding bonds may be considered distressed debt. Investors who specialize in distressed debt may purchase these bonds at a discounted price with the expectation of either profiting from the company’s recovery or through the liquidation of its assets.
Explore IVP Technology and Managed Services:
IVP for Private Funds helps private fund managers automate deal lifecycle management, enhance portfolio management, and improve analytics and reporting. By leveraging the IVP for Private Funds platform, fund managers can effectively track distressed debt investments and analyze their performance. The platform enables seamless data management, deal flow tracking, and comprehensive portfolio performance analysis, allowing fund managers to make informed investment decisions and maximize returns in the distressed debt space.
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