Alternative Investments

Distressed Debt

Definition

What is Distressed Debt?

Debt of borrowers in financial difficulty, often trading at a deep discount.

Example in practice

An investor buys defaulted bonds expecting a restructuring recovery.

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A company that finances producers in exchange for a percentage of revenue or output.

A financing arrangement granting the investor the right to buy part of future production at a predetermined price.

Non-bank lending to privately held companies or assets.

An investment combining debt and derivatives to create a defined payoff.

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