The re-emergence of distressed exchanges in corporate restructurings
In 2008 and 2009, bondholders of ailing companies were affected by areemergence of an important corporate restructuring strategy, known as aDistressed Exchange. Fourteen companies in 2008 completed this desperateattempt to avoid a formal bankruptcy filing – about twice as manyas any single year in the last 25 years, involving twice as much indollar amount than in the entire prior history (1984-2007). And, in justthe first four months of 2009, nine firms have already completeddistressed exchanges. The recovery rate to bondholders participating indistressed exchanges over the last 25 years is significantly higher thanrecoveries on other, more dramatic types of default – namelypayment defaults and bankruptcies. But, there is no guarantee that adistressed exchange will permanently immunize the firm from furtherdistress, with almost 50% of all companies completing distressedexchanges prior to 2008 ultimately filing for bankruptcy.
Year of publication: |
2009-09-03
|
---|---|
Authors: | Altman, Edward ; Karlin, Brenda |
Saved in:
freely available
Saved in favorites
Similar items by person
-
The re-emergence of distressed exchanges in corporate restructurings
Altman, Edward I., (2009)
-
Measuring default risk in the US high-yield bond market
Altman, Edward I., (2003)
-
Defaults & returns on high yield bonds : analysis through 2000 & default outlook
Altman, Edward I., (2001)
- More ...