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Distressed Securities Related News
 in chronological order

 See also: Distressed Securities Related Books, Distressed Securities Related Scholarly Papers, or Distressed Securities Home Page.

Table of Contents:
 

Alchemy's Moulton sees distressed opportunities ahead
April 25, 2006
From Reuters:
 Opportunities to buy distressed companies or their debt are opening up and will continue to do so as economies worsen amid the global credit crunch, a leading buyout executive said on Friday.

Highly indebted companies in cyclical industries such as construction, real estate and retail are likely to struggle to make interest payments, making their debt trade at a discount in the secondary market, or cutting the value of the equity.

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Distressed Deals Beyond 2008 and More to Be Covered at iiBIG's Distressed & Turnaround Investment Forum
April 22, 2006
From Marketwire:
 Following the success of the September 2007 Las Vegas, iiBIG will bring the Distressed Series East to New York City for the 2008 Distressed & Turnaround Investment Forum, May 14-15, 2008 at the Marriott Marquis.

New Opportunity Funds focusing on distressed investing are opening almost daily as asset valuations and the credit crunch are creating outstanding prospects for investors and turnaround managers. The credit crunch is no doubt having an impact on the buy-out markets, particularly at the high-end of the scale -- deals in $2 billion-and-up category. But with those larger deals becoming harder to do, even the larger funds -- and others with "dry-powder" -- are focusing on distressed investments in the middle-markets where transaction activity remains strong and lucrative deals are being done.

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BlackRock proves its credentials
March 31, 2006
From FinancialNews-US.com:
 When the New York Federal Reserve realized just over a week ago that it would need a manager to run the portfolio of mortgage-backed securities it was taking as collateral for a $30bn (€19bn) loan to Bear Stearns, US-listed asset manager BlackRock was the obvious choice.

By the admission of its rivals, BlackRock is one of fewer than half a dozen asset managers with the expertise and resources to take on such an assignment, alongside Pimco, Western Asset Managers and Goldman Sachs Asset Management.

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Citigroup hires two for distressed debt fund
March 28, 2006
From FinancialNews-US.com:
 Citigroup’s alternative investments division has hired a portfolio manager to run a new structured credit fund as the bank joins the wave of institutions seeking to capitalize on opportunities in distressed debt in the wake of battered credit markets.

Jerome Anglade, who was previously head of European credit structuring at Morgan Stanley, will join Citigroup on May 15 and will be tasked with creating the fund. Anglade will be based in London.

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R.H. Donnelley, Idearc Defaults Signaled as Media Debt Tumbles

March 20, 2006
From Bloomberg:
 Apollo Management, the American private equity group, could be forced to pump millions of pounds of cash into Countrywide, Britain's biggest chain of estate agents, in a bid to shore up its investment in the group.

Countrywide's debt is changing hands at "seriously distressed" levels, according to specialist traders who believe the company will need to call on Apollo's support to help it through the slowdown in the British housing market.

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Countrywide in a state over distressed debt
March 16, 2006
From Telegraph.co.uk:
 Apollo Management, the American private equity group, could be forced to pump millions of pounds of cash into Countrywide, Britain's biggest chain of estate agents, in a bid to shore up its investment in the group.

Countrywide's debt is changing hands at "seriously distressed" levels, according to specialist traders who believe the company will need to call on Apollo's support to help it through the slowdown in the British housing market.

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Distressed Investing Opportunities in the Middle Markets, More at iiBIG New York City Forum
March 13, 2006
From Marketwire:
 Headlines are dominated by names like "Blackstone" and "Carlyle" but the meat-and-potatoes of the distressed investing business are in the middle markets -- the focus of iiBIG's Distressed & Turnaround Investment Forum EAST, scheduled for May 14-15, 2008 in New York City.

The credit crunch is no doubt having an impact on the buy-out markets, particularly at the high-end of the scale -- deals in $2 billion-and-up category. But with those larger deals becoming harder to do, even the larger funds -- and others with "dry-powder" -- are focusing on distressed investments in the middle-markets where transaction activity remains strong and lucrative deals are being done.

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Private equity's distressed debt investment party
March 13, 2006
From BloggingBuyouts:
 According to The New York Times, everybody's doing it! Well, maybe not the birds and the bees, but certainly Blackstone (NYSE: BX), KKR, and now Apollo Management, the latter to the tune of $1 billion, are investing in distressed debt.

It's no surprise that Blackstone is ahead of the game and has already raised a $1.4 billion fund to focus on cheap loans and bonds. The Deal.com also lists Cerberus and Carlyle as being interested in joining the party.

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GLG explores move into distressed debt
February 7, 2006
From Telegraph.co.uk:
 GLG, one of London's largest hedge funds with $24bn (£12.2bn) of assets under management, is considering investing in distressed debt in order to benefit from the continuing credit crisis.

The hedge fund, run by chairman Noam Gottesman, is exploring the possibilities thrown up by the amount of such debt in the markets.

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Octavian Expands Distressed Debt Team
February 6, 2006
From FOXBusiness.com:
 Octavian Advisors, LP, a $1.1 billion alternative investment management firm specializing in international special situations, announced the appointments of Arif Gangat as Managing Director and Oscar Mockridge as Director. Both will specialize in distressed debt investments outside the United States.

"The turmoil in worldwide markets provides a perfect backdrop for Octavian's unique style of investing," said Richard Hurowitz, co-founder and Chief Executive Officer. "I have worked with both Arif and Oscar for over six years and their analytical and risk management skills will be a tremendous asset as we continue to expand our worldwide distressed investing capabilities."

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Debtwire Unveils 2008 Distressed Debt Outlook for North America
January 15, 2006
From SunHerald.com:
 Debtwire, the leading distressed debt and leveraged finance real-time news and data service, today announced the findings of its 2008 Distressed Debt Market Outlook for North America survey. The study, published in conjunction with Bingham McCutchen LLP, FTI Consulting, Inc. and Macquarie Securities (USA) Inc., highlights major issues and trends facing the North American distressed debt market in 2008 and includes the expectations of market participants.

While most traditional investors look for companies on a growth track, distressed specialists focus on the darker side of the economy. They track industries and corporations that are poised for collapse or those that have already fallen and are undervalued as a result. Nearly three-quarters of respondents said they plan to place more of their assets in distressed debt in 2008.

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Over $5 bln distressed securities being liquidated
January 8, 2006
From Reuters:
 Managers of several so-called collateralized debt obligations are liquidating over $5 billion of distressed securities from their portfolios over the next few days, market sources said on Tuesday.

One auction occurred late Monday and two other auctions are slated for later Tuesday. The auctions total $1.5 billion for the "TABS 2006-5" portfolio, which includes collateralized mortgage obligations, other CDOs and home equity ABS securities, the sources said.

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Blackstone creates distressed debt fund
December 13, 2006
From BusinessWeek:
 Blackstone Group established a $1.3 billion fund to snap up debt trading at cheap prices in the wake of this year's credit turmoil, the investment firm said Thursday.

Blackstone unveiled the launch of the Blackstone Credit Liquidity Partners L.P. fund, which will invest in bank debt, commitments to finance corporate takeovers, collateralized debt obligations and other investments skewered by the seizure in financial markets.

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Oaktree Plans EU1.25 Billion Fund for European Distressed Debt
December 7, 2006
From Bloomberg:
 Oaktree Capital Management LLC, the investment firm run by Howard Marks, plans to raise 1.25 billion euros ($1.83 billion) for a European distressed debt fund.

The pool is more than three times bigger than the $500 million the Los Angeles-based firm raised for its first European distressed debt fund last year, according to a document sent to potential investors. Oaktree plans to complete raising the money by the end of the year.

Source                                                                                                 ▲ top
 

Distressed Securities, Equity L/S Suffer In November
December 6, 2006
From FINalternatives:
 November was bad, but not as bad as it seemed from early indicators, according to Dow Jones. To be sure, five of six of the Dow Jones Hedge Fund Strategy Benchmarks were in the red last month, but none was down as much as predicted.

Distressed securities funds were the worst off, dropping 2.25% in November (but up 0.94% year-to-date), followed by equity long/short, which was down 2.04%. Still, the latter remained the top-performing strategy tracked by Dow Jones with a year-to-date return of 18.05%.

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Distressed debt players eye prospects in LBO debt
December 5, 2006
From Reuters:
 Distressed debt investors are eyeing leveraged buyout debt as one of their next big buying opportunities as financing spigots for shaky companies close, according to an investor survey published on Wednesday.

More than 85 percent of distressed debt investors and other leveraged debt players polled said they are concerned about how companies will refinance massive debt taken on for their LBOs, a survey commissioned by law firm Bracewell & Giuliani found.

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'Vultures' Circle, Warily
November 30, 2006
From The Wall Street Journal Online:
 With its purchase this week of assets from mortgage lender E*Trade Financial Corp., Citadel Investment Group seemed to signal a rising investor appetite for distressed securities and provide a possible indication that a bottom in the mortgage crisis could be nearing.

Not so fast. The "vulture" market, as it is known, is now flush with cash. By some estimates, such funds have raised more than $600 billion in recent years, much of it accumulated recently to pounce on opportunities created by mortgage-market turmoil. But many of them are keeping their powder dry.

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Distressed debt shows biggest jump in five years
November 29, 2006
From FinancialNews-US.com:
 The amount of debt trading as distressed in the US market has seen its largest monthly leap in five years which could be an indicator of increased defaults despite recent actions by central banks to stimulate credit markets.

In November, the US distress ratio rose to 4.9% from 2.3% a month ago and 2.1% a year ago, according to ratings agency Standard & Poor's.

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Centerline To Launch Distressed Fund
November 20, 2006
From InstitutionalInvestor.com:
 Centerline Capital Group is marketing a $1 billion distressed fund that will invest in commercial real estate loans, commercial mortgage-backed securities and collateralized debt obligations. "We believe there are abundant opportunities to acquire bonds and mortgages trading at depressed market values due to factors such as market illiquidity, poor collateral performance or poor asset management," Mark Schnitzer, ceo, said last week during Centerline's third-quarter earnings call. He added that there has been strong investor reaction to the proposal.

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GSC Group to buy distressed mortgage securities
November 15, 2006
From Reuters:
 GSC Group is marketing a new fund that will invest in distressed subprime residential mortgage-backed securities, a spokesman for the investment firm said on Thursday.

"We are getting ready to launch the distressed fund which will be run by our real estate group," said spokesman Carl Crocetto.

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Vultures Swoop In On Builders' Land
November 9, 2006
From TheStreet.com:
 Real estate vulture funds are scouring the U.S. for distressed housing developments and land sites being sold at cheap prices by homebuilders looking to clean up their balance sheets.

These funds, which target internal rates of return greater than 20%, are not betting on any immediate recovery in housing. Instead, they're seeing profit in buying the housing sites today --many of which are selling at 50% or greater below their peak 2005 values -- with the aim of flipping them or selling homes at the projects in two years or more.

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Expert seeks opportunity in distressed funds
November 7, 2006
From London Stock Exchange:
 The latest financial crisis in the credit market will eventually allow distressed funds to be involved in restructuring, according to Pioneer.

Reported in Reuters, Mark Baker, co-chief investment officer of funds-of-hedge-funds at Pioneer, commented that he has a "high weighting" of his portfolios in distressed hedge funds.

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Onex Establishes New Distressed Debt Platform
November 2, 2006
From Earthtimes.org:
 Onex Corporation (TSX: OCX) announced today that it has established Onex Credit Partners, a credit-investing platform focused on generating attractive risk adjusted returns through the purchase of undervalued credit securities. This initiative underscores Onex' commitment to grow its alternative asset management business through a focus on strategies that can benefit from Onex' broad industry expertise and value oriented investing philosophy.

Onex Credit Partners will be led by Michael Gelblat and Stuart Kovensky, seasoned credit investing professionals and co-founders of GK Capital. Prior to founding GK Capital in 2005, Mr. Gelblat and Mr. Kovensky were co-managers of the Levco Debt Opportunity Fund. Together they have established an outstanding track record, experiencing only eight down months since inception in July 2001 and consistently outperforming benchmark indices. Onex has acquired a 50% interest in GK Capital, which has approximately $300 million of assets under management and has been renamed Onex Credit Partners. The firm will retain the entire GK Capital team. Additionally, Onex has committed $50 million to be invested in Onex Credit Partners' strategies.

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New Jersey Jumps On Distressed-Credit Bandwagon
October 29, 2006
From FINalternatives:
 New Jersey’s State Investment Council last week voted to commit a total of $350 million to two hedge funds and a private equity fund.

The Garden State is committing $125 million to the PIMCO Distressed Mortgage Fund and a $100 million to the Centerbridge Distressed Credit Partners Fund. PIMCO, which currently manages $693 billion in fixed-income assets, is raising the Distressed Mortgage Fund “to take advantage of the opportunities they see resulting from the current dislocation in the mortgage market,” according to an internal memo from William Clark, director of the division of investment. The PIMCO mortgage team is headed by Dan Ivascyn and Scott Simon, the co-portfolio managers of the Distressed Mortgage Fund.

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ING raises $730 million to invest in distressed real estate debt
October 11, 2006
From The International Herald Tribune:
 The real estate unit of ING Groep raised $730 million in the United States to buy high-yield commercial real estate debt and benefit from widening spreads and investors' selling at discounted prices.

"Demand was very strong. We could probably have raised more," said David Blight, chief executive of ING Real Estate Investment Management, the world's largest property fund manager. "The challenge is to get it invested, as liquidity has to a large extent dried up."

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JPMorgan setting up distressed debt fund
October 10, 2006
From Reuters:
 JPMorgan Chase & Co(JPM.N: Quote, Profile, Research) is creating a distressed debt fund which will be offered to the No. 3 U.S. bank's deep-pocketed clients, the head of its U.S private bank said on Wednesday.

"It's actually in process right now," JP Morgan Private Bank Chief Executive Catherine Keating told the Reuters Wealth Management Summit, declining to provide additional details of the fund.

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Halbis launches macro fund
October 4, 2006
From Reuters UK:
 HSBC Halbis Partners, the active fund management arm of HSBC Investments, has launched a global macro hedge fund and says distressed debt strategies will also offer opportunities for investors.

Bill Maldonado, head of alternative investments at Halbis, told Reuters in an interview the firm launched the Halbis Global Macro fund, Halbis's first such strategy, in June.

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Dalton Investments Launches Distressed Mortgage Strategy
October 2, 2006
From Yahoo! Finance:
 Dalton Investments, LLC, a SEC- registered investment management firm serving institutional and private clients, today announced that it is offering a new distressed-mortgage strategy that will buy defaulted loans from mortgage servicing companies at significant discounts and restructure them, providing affordable monthly payments for homeowners and a residential mortgage- and real estate-backed investment vehicle for Dalton's investors.

The new strategy, which is a joint venture with Beach Front Property Management, Inc. of Long Beach, Calif., will be managed by Steven D. Persky, co-founder and chief executive officer of Dalton Investments, and Kyle Kazan, president of Beach Front Property Management (BFPM). BFPM, founded in 1999 by Mr. Kazan and James B. Rosenwald III, co-founder and managing partner of Dalton Investments, currently manages more than 2,000 single family homes and apartment units in California.

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Onex eyes debt market
September 27, 2006
From The Globe and Mail:
 Onex Corp., after years of talking about investing in distressed debt, is close to finally making it happen just as the market is poised to explode.

The firm, following in the footsteps of Blackstone Group and other investment firm competitors, wants to find a way to take advantage of the shutdown in the lending market that has stopped the mega-buyout business.

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BlackRock Close To Raising $3 Billion-$5 Billion For Debt Fund - Source
September 26, 2006
From CNNMoney.com:
 BlackRock Inc. (BLK), the asset-management giant that bought Merrill Lynch Inc.'s (MER) money-management unit last year, is on track to complete fundraising for one of the biggest distressed debt vehicles ever raised by next week, said a person familiar with the process.

The New York-based money manager, which announced plans for the fund in early September, expects to collect between $3 billion and $5 billion to invest in discounted bank loans and other beaten-down debt, the person said. Closing is expected in early October.

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Distressed debt set for comeback
September 18, 2006
From FinancialNews-US.com:
 Distressed debt investors have been starved of trading opportunities over the past five years amid benign credit conditions.

But the market turbulence since June has changed that and the market value of non-defaulted, distressed companies more than doubled in eight weeks.

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Pimco to launch $2 billion distressed debt fund: report
September 13, 2006
From Reuters UK:
 Pacific Investment Management Co is planning to launch a $2 billion distressed-debt fund, The Wall Street Journal reported in its online edition on Thursday.

The Pimco Distressed Mortgage Fund will invest in a variety of assets, including mortgage-backed securities, asset-backed securities and collateralized debt obligations, the Journal reported, citing a Pimco document. Pimco is a unit of Germany's Allianz SE (ALVG.DE: Quote, Profile , Research).

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CORRECTED: At distressed yields, Hovnanian may be good
September 10, 2006
From Reuters:
 Credit spreads of Hovnanian Enterprises Inc. (HOV.N: Quote, Profile, Research) are trading at levels that are close to implying distress, but with ample liquidity the upscale home builder's debt may be good value.

Hovnanian Enterprises reported a quarterly loss on Thursday and warned that conditions in most of the regions it operates in remain challenging, suggesting the housing market slump that has hit the industry hard is far from over.

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Investors prepare for discounted and distressed debt
September 7, 2006
From Reuters UK:
 Banks, hedge funds and private equity firms are poised to pour billions of dollars into leveraged loans and distressed debt to capitalise on the recent credit market turmoil.

The investment community is struggling to absorb about $300 billion (150 billion pounds) of global loans in the pipeline, most coming from the record-setting leveraged buyout boom in the first half.

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Distressed Bonds Increase Most Since 2003, Led by WCI (Update1)
September 5, 2006
From Bloomberg:
 Distressed bonds are increasing at the fastest rate in four years on growing concern that the era of record-low defaults is coming to an end.

The corporate bond market's favorite securities last year, so-called distressed debt, yield at least 10 percentage points more than Treasuries. Since June, the amount of distressed bonds has risen more than fivefold to $24.8 billion, according to an index Merrill Lynch & Co. began compiling in 1997.

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Eos Preps Distressed Debt Fund
September 4, 2006
From FINalternatives:
 On Wall Street, disaster and opportunity are often one and the same. So as the U.S. subprime mortgage crisis drags down the credit market, the distressed-debt space is starting to get a little crowded.

New York-based alternative asset manager Eos Partners is joining the scrum, planning a distressed debt hedge fund for launch this fall. The firm hopes to raise between $750 million and $1 billion and will focus on European middle-market acquisitions, Financial News reports. Matt Meehan will manage the fund.

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Sharp Rise in Number of Companies With Distressed Debt
August 30, 2006
From The New York Sun:
 The number of companies whose bonds are trading at distressed levels nearly doubled in the last month, to 148, according to Standard & Poor's. Among them are several New York standouts, including Duane Reade, Revlon, and Six Flags.

"These companies are vulnerable and their margins for error are razor slim," a managing director at S&P, Diane Vazza, said.

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US distressed debt jumps fivefold
August 28, 2006
From FinancialNews-US.com:
 The amount of US debt trading as distressed has jumped fivefold to $12.7bn (€9.3bn) in the past month, which could be an indicator of increased defaults as credit conditions worsen.

Last month, distressed issues affected debt worth $2.5bn across seven sectors, according to a report from ratings agency Standard & Poor’s. By August 15, distressed issues had spread across 13 sectors with media and entertainment making up the largest portion: 37%.

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Hedge funds see opportunities in distressed debt
August 22, 2006
From Reuters UK:
 Funds of hedge funds managers are looking at opportunities in the distressed debt sector as tougher credit conditions make corporate refinancing more of a challenge than has been the case in recent years.

"A lot of companies ... were able to refinance in very benign conditions. I think we'll see a lot of companies file for bankruptcy and become distressed or stressed," Ken Kinsey-Quick, who manages around $1.2 billion (600 million pounds) in funds of hedge funds at Thames River Capital, told Reuters.

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New Environment for Distressed Investors and Turnaround Managers: Focus of September Conference
August 22, 2006
From Yahoo! Finance:
 The recent turmoil in the credit and equity markets -- and what it means for the future -- will be a hot topic when prominent leaders from the distressed investing and turnaround management industries meet at iiBIG's 2007 Distressed & Turnaround Investment Forum, scheduled for September, 24-25, 2007 at the Flamingo, Las Vegas.

This conference is THE must-attend distressed & turnaround event.

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CHRONOLOGY-Global credit crunches since the 1980s
August 8, 2006
From Reuters:
 A jump in the cost of corporate borrowing swept across financial markets over the past month as losses from distressed U.S. subprime mortgages -- mortgages to borrowers with low credit ratings -- led to a more general repricing of risky assets.

With many new bond and loan financings postponed due to rising volatility of debt markets and default insurance, concern about the possibility of a wider credit crunch has increased.

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Current Credit Concerns & Economic Outlook for Distressed and Turnaround Investing, More at Annual Conference
August 8, 2006
From NewsReleaseWire.com:
 With recent market activity keeping investors nervous about credit tightening and possible inflation, how will the debt markets affect the current landscape of distressed and turnaround investing? iiBIG’s Distressed & Turnaround Investment Forum, scheduled for September 24-25, 2007, at The Flamingo in Las Vegas will cover these issues and more.

The conference will begin with a review of the current market outlook; key drivers impacting market conditions and dynamics; cross-border, U.S. domestic and regional outlooks; overview of sectors and asset types; and trends in primary and secondary markets.

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Recent Market Volatility's Effect on Distressed Investing
August 1, 2006
From EarthTimes.org:
 Recent fallout from the subprime housing market, increasing credit worries, and rising energy prices are sending investors scrambling. How will this affect the current landscape and future outlook for distressed investing? iiBIG's Distressed & Turnaround Investment Forum, scheduled for September 24-25, 2007, at The Flamingo in Las Vegas will cover these issues and more. This two-day, two-track conference is designed for distressed and turnaround investors, managers, advisors, lenders, consultants, counsel, and other leading players.

Sessions will cover timely topics addressing today's issues as: -- How distressed investors can profit from the subprime mortgage crisis -- "Future American "Bubble Economy": Future fortunes for turnaround managers and how credit downturn will affect distressed investors -- Outlook for the Distressed & Turnaround Markets: Key drivers impacting market conditions and dynamics; cross-border, U.S. domestic and regional outlooks; overview of sectors and asset types; and trends in primary and secondary markets -- The Economic Environment & Outlook: Will underlying economies produce more or fewer distressed debt obligations? -- Trends in Distressed Investing & Lending: How will the player mix change in the next wave? -- Blood in the Water: Domestic distressed sectors around which investors will soon circle.

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Marathon Runs At Sub-Prime Opportunity
July 31, 2006
From FINalternatives:
 It’s been a loser so far in the sub-prime realm this year, but Marathon Asset Management has a plan to turn its luck around.

The New York-based hedge fund has announced plans to launch a distressed mortgage fund, seeking to take advantage of the “fallout and carnage” wreaked by the sub-prime swoon, MarketWatch reports.

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United Kingdom: Closing A Distressed Debt Trade Over The Phone - The Binding Basics

July 24, 2006
From Mondaq:
 The High Court provided some extremely useful guidance in relation to oral contracts in the context of distressed debt trading in the decision of Bear Stearns Bank plc v Forum Global Equity Ltd [2007] EWHC 1576 (Comm) handed down last week.

For participants in financial markets generally where it is the norm to reach agreement orally after telephone negotiations, this decision provides welcome assurance that once material terms are agreed, such agreements are not easily avoided by claims of uncertainty or incompleteness, the Courts looking to substance over form in assessing whether a valid bargain has been struck. That begs the question of what material terms will be sufficient. What readers are likely to find illuminating and perhaps surprising from this case is that agreement on few very basic terms can be sufficient to create a binding trade - that is, even absent standard terms published by industry associations such as the UK Loan Market Association (the "LMA"). This article makes some observations on the case and gives some tips for best practice

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Distressed debt assets already top ’06 total

July 16, 2006
From Pensions & Investments:
 Distressed debt funds raised $23.7 billion in the first half of the year, up from $19 billion raised in all of 2006, according to data released by Dow Jones Private Equity Analyst.

U.S. private equity firms raised $137 billion in 199 funds in the first half of 2007, up from $96 billion raised in 147 funds in the first half of 2006 and $131.9 billion in 195 funds for all of last year.

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Distressed debt fundraising hits record

July 13, 2006
From FinancialNews-US.com:
 Distressed-debt fundraising so far this year has already outpaced the tally for all of 2006, as high leverage levels and sub-prime downgrades create doubts about the credit markets.

Dow Jones’s Private Equity Analyst found that distressed-debt firms raised $23.7bn (€17.8bn) in the first six months of 2007, which is the highest volume of fundraising in any full year to date.

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Indian distressed assets investor joins UK's AIM

July 12, 2006
From Reuters India:
 Dhir India Investments has become the UK's first quoted company to invest in India's $50 billion dollar-plus non-performing assets sector after floating on London's junior AIM share market on Thursday.

The Isle of Man-registered company said in a statement it had raised 25 million pounds ($50.8 million) via a placing of just over 16.6 million shares at 150 pence each.

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Centerline to start distressed debt fund

June 26, 2006
From Reuters:
 Centerline Capital Group is in the preliminary stages of creating a fund to snap up distressed debt on commercial property, the real estate finance company's chief executive said on Tuesday.

"We believe that there will be opportunities to acquire debt that has broken," Marc Schnitzer said at the Reuters Global Real Estate Summit in New York.

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US bankers, lawyers gear up for distressed M&A boom

June 22, 2006
From Reuters:
 Last month, a team of bankers from Houlihan Lokey set out on a whirlwind tour of 10 U.S. cities, with stops ranging from the Beverly Hills Hotel in Los Angeles to Boston's Four Seasons.

The prominent middle-market firm's bankers weren't on a roadshow or due diligence trip. Instead they were conducting a month-long seminar on Wall Street's hottest buzz phrase: distressed mergers and acquisitions.

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Distressed Vet Turns Marketing Chief At Group G

June 6, 2006
From FINalternatives:
 Alternatives firm Group G Capital Partners has added a distressed securities expert to lead its marketing and business development strategies.

Alyson Gardner Kiesel was named director of marketing and strategic development at the $165 million New York-based fund. She joined from Pali Capital, where she helped launch the distressed desk. She has also worked on high-yield and distressed securities at Libertas Partners and CRT Capital Group.

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Man Group to expand in distressed investments

June 6, 2006
From Reuters Italia:
 Man Group, the world's largest listed hedge-fund company, plans to expand its investments in distressed companies, Chief Executive Peter Clarke said on Wednesday.

"We are looking for people in distressed," Clarke told Reuters. "We view distressed as an area where we're planning to grow." He declined to provide specific expansion targets.

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Looming Crash Prompts Jump in Distressed Debt Hiring (Update1)

May 30, 2006
From Bloomberg:
 The biggest winners from the global buyout boom are hiring distressed-debt bankers in Europe at the fastest pace in five years.

Goldman Sachs Group Inc., the world's most profitable securities firm, hired Andrew Wilkinson, the lawyer who advised creditors in the bankruptcies of Eurotunnel Plc and Parmalat Finanziaria SpA, to help lead its restructuring business in London. Morgan Stanley, the third most-active merger adviser this year behind Citigroup Inc. and Goldman, added seven bankers in the past year, boosting its group to 61. Blackstone Group LP, poised to become the world's largest publicly traded buyout firm, is starting a corporate restructuring group in Europe.

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Private-equity firm Ares to sell stake

May 30, 2006
From BusinessWeek:
 Ares Management LLC, a private-equity and distressed-debt investor, said it has sold a minority stake in itself for up to $375 million to an unnamed buyer, becoming the latest private-equity firm to offer up a piece of its management company.

Ares said in a release that the new investor was a "longstanding client" of the Los Angeles-based firm, which also runs the publicly traded lender Ares Capital Corp.

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‘Distressed Investing’ Can Yield Healthy Returns for Savvy Backers

May 22, 2006
From NewsReleaseWire.com:
 Investing in underperforming companies can be lucrative for those who know what to look for and how to execute. You must ascertain that a company can be turned around, buy it at the right price, know how to fix the problems, avoid spending money on past sins, and sell at increased value.

While simply stated, it is tricky to implement.

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One-third of N. American auto suppliers distressed

May 17, 2006
From Reuters:
 About one-third of auto parts suppliers in North America are in financial distress, according to a study released on Thursday by industry consultants BBK.

The study also found that about 22 percent of the largest auto parts suppliers could fall into significant financial distress in the next year, making it critical that automakers and top suppliers keep close tabs on their suppliers.

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As Market Shifts, Locating Opportunities in Troubled Situations to be Highlighted At Dow Jones Distressed Investment Forum

May 4, 2006
From PrimeNewswire:
 As companies and even private equity firms have loaded up on debt over the past few years, experts have predicted a coming wave of defaults. Now, dozens of leading hedge funds, distressed debt firms, law firms, bankruptcy investors and turnaround specialists will be discussing their strategies for locating opportunities in the expected downturn at the Dow Jones Distressed Investment Forum at the Grand Hyatt in New York City on May 24.

The inaugural one-day event will provide a comprehensive view of the key indicators of troubled companies and offer a chance to meet and discuss the issues with the investors who are likely to be front and center once the downturn begins.

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Focus DIY set for rescue deal

May 1, 2006
From Financial Times:
 Focus DIY is in advanced talks with Apollo Management, the US buy-out group that specialises in distressed debt investments, to agree a reconstruction that will save the home improvement company from bankruptcy.

The travails of the DIY group have come to underline the risks associated with leveraged buy-outs as it has struggled to service its heavy debt burden in a tough market.

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Borrowing from Peter, paying Paul

April 24, 2006
From AccountancyAge:
 If you are a corporate borrower, there is more than a three-to-one chance that your debt has changed hands and is not held by your arranger bank. Most probably, it is being managed by a hedge fund, collateralised debt obligation (CDO) fund or collateralised loan obligation (CLO) fund.

This is particularly true for British corporates, which, as of the first half of last year, were the largest European issuers of leveraged debt, amounting to (euro) 33.2bn (25% of the market), compared with (euro) 16.1bn for second-place issuer Germany. Banks, in fact, retain a much lower direct economic interest and increasingly see their role as arrangers and distributors in the syndicated loan market. The presence of these new players and the increased liquidity they bring to the market has led to higher levels of corporate leverage as well as more attractive terms. But it has also encouraged lending to lower credit quality corporates.

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Where the real smart money's starting to flow

April 24, 2006
From Crikey:
 With all the focus on private equity, many finance commentators seem to be paying less attention to the inexorable rise of hedge funds.

According to Hedge Fund Research, the industry saw $60 billion of inflows into funds in the first quarter of 2007. This is nearly half of the record $126 billion in new assets for all of 2006.

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Wind of change for distressed debt

March 1, 2006
From FinancialNews-US.com:
 Private equity firms, hedge funds, traditional long-only equity managers and fixed income managers are moving into distressed debt in preparation for a potential credit market downturn.

High leverage multiples, relaxed banking covenants and rising interest rates are fuelling predictions of an imminent shift in the cycle.

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San Bernardino Searches for Energy, Distressed Debt Hedge Funds

February 28, 2006
From FINalternatives:
 The $5.7 billion San Bernardino (Calif.) County Employees Retirement is currently conducting invitation-only searches, via its consultant, New England Pension Consultants, for an energy hedge fund and a distressed debt shop, according to spokeswoman Danielle DePalma. The system is allocating $40 million to its energy mandate and $45 million to its distressed debt mandate.

The system’s board last month approved a $50 million allocation to Sterling Stamos—the investment firm headed by New York Mets owner Fred Wilpon—for a fund of credit hedge funds mandate.

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Barclays Nabs Three From Oaktree

February 14, 2006
From FINalternatives:
 Barclays Capital has hired three executives from Oaktree Capital Management to bolster its U.S. distressed debt and special situations team.

Matt Barrett former managing director of Oaktree’s Opportunities Funds, a global distressed debt/special situations fund, will become the new head of distressed debt and special situations investing. Fellow Oaktree alumni Brian Berman and Holly Kim join Barclay’s as managing directors. Both worked under Barrett in its distressed debt/special situations group.

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Banking Matters: Distressed debt specialists are feeling misunderstood

February 12, 2006
From The International Herald Tribune:
 The founders of Cerberus Capital Management, one of the most renowned firms in the field of distressed debt, reinforced the negative stereotype image of the industry when in 1992 they named their company after a three-headed watchdog of Greek mythology that guards the entrance to the underworld.

But distressed debt specialists are feeling misunderstood at a time when they are preparing for business to pick up.

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Martin Whitman's Distress Success Secrets

February 8, 2006
From The New York Sun:
 Martin Whitman reminded an executive conference yesterday why he has become one of the most prominent investors in the field of distressed markets. "In distress investing, Chapter 11 is not an ending," he said. "Rather, it is a beginning."

The legendary founder and chairman of Third Avenue Management LLC led off a full day of panel discussions and lectures at the Argyle Executive Forum, which centered on what has become one of the hottest areas of both the private equity and hedge fund investment arenas.

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Martin Whitman's Distress Success Secrets

February 8, 2006
From The New York Sun:
 Martin Whitman reminded an executive conference yesterday why he has become one of the most prominent investors in the field of distressed markets. "In distress investing, Chapter 11 is not an ending," he said. "Rather, it is a beginning."

The legendary founder and chairman of Third Avenue Management LLC led off a full day of panel discussions and lectures at the Argyle Executive Forum, which centered on what has become one of the hottest areas of both the private equity and hedge fund investment arenas.

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Martin Whitman's Distress Success Secrets

February 8, 2006
From The New York Sun:
 Martin Whitman reminded an executive conference yesterday why he has become one of the most prominent investors in the field of distressed markets. "In distress investing, Chapter 11 is not an ending," he said. "Rather, it is a beginning."

The legendary founder and chairman of Third Avenue Management LLC led off a full day of panel discussions and lectures at the Argyle Executive Forum, which centered on what has become one of the hottest areas of both the private equity and hedge fund investment arenas.

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JP Morgan plans Indian distressed assets firm

February 6, 2006
From Reuters India:
 JP Morgan, the third-largest U.S. bank, plans to set up an asset reconstruction company in India to deal in distressed assets, a senior official said on Tuesday.

"We are talking to a few players for an asset reconstruction company, but it is in an early stage of discussions," Sanjai Vohra, managing director, Asian Special Situations Group at JP Morgan, told reporters on the sidelines of a financial conference.

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Goldman distressed debt co-head to retire at 47

January 22, 2006
From Reuters:
 Goldman Sachs Group Inc. (GS.N: Quote, Profile , Research) said on Monday that Mark McGoldrick, a London-based executive who helped run the bank's global distressed debt-investment business, plans to retire for personal reasons.

McGoldrick, 47, was best known for his role in snapping up debt issued by failed Japanese golf courses. These holdings, combined into Accordia Golf (2131.T: Quote, NEWS , Research) and sold through an initial public offering last November, generated a gain of about $500 million for Goldman in its fourth quarter.

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European Distressed Debt Market Outlook for 2007 Foresees Upswing In Restructurings

January 18, 2006
From CNW Telbec:
 Launched this week by international law firm Cadwalader, Wickersham & Taft LLP and investment banking group Rothschild, in conjunction with Mergermarket's Debtwire, the third annual European Distressed Debt Market Outlook provides a comprehensive and in-depth report of the opinions and expectations of European and U.S. investors regarding the outlook for the European distressed debt market in the year ahead. For the first time, the 2007 report also features sections on private equity sponsors and corporates who have been through a restructuring in the last two years.

Among the noteworthy findings are: a resounding 83% of private equity sponsors expect to play an active role in a restructuring in 2007, while 60% of private equity investors expect between 11% and 20% of the 'typical' portfolio to be hit by covenant amendments or debt restructurings.

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Distressed firm hires Goldman banker as COO

January 17, 2006
From FinancialNews-US.com:
 Redrock Capital Management, a distressed investment firm, has appointed a former Goldman Sachs investment banker as its chief operating officer and vice president of research.

Gregory Kennedy, who joins Redrock at the end of this month, worked in Goldman Sachs’ industrials investment banking group where he focused on mergers and acquisitions, capital raising and domestic and cross-border advisory assignments.

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Distressed Debt Specialists Sound Off In New Survey

January 12, 2006
From FINalternatives:
 Housing will likely have a hard landing this year and consumer spending will also hit a rough patch, according to a recent survey of 106 distressed debt prop traders and hedge fund managers, conducted by distressed and high-yield data provider Debtwire. As new debt issuance dries up in 2007, hedge funds that participate in the space will find a tougher fund raising environment. And as competition heats up for lesser deals, hedge funds will make riskier bets resulting in attrition for some of the 1,000 funds this year.

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Distressed Confirmed As Winning Strategy for 2006

January 11, 2006
From Black Enterprise:
 Preliminary monthly data from Dow Jones Indexes on the performance of the Dow Jones Hedge Fund Strategy benchmarks confirm that distressed securities proved the best-performing hedge fund strategy of 2006. Other hedge fund indexes have already identified distressed securities as the year's top-performing strategy.

Dow Jones benchmarks identify just six strategies: convertible arbitrage, distressed securities, event driven, merger arbitrage, equity market neutral and equity long/short. All six strategies ended the year in positive territory, with net-of-fee returns ranging from a high of 15.30% for distressed to a low of 7.12% for equity market neutral. Other strategies that made double-digit returns were event driven, which returned 12.55%, and convertible arbitrage which, after its annus horribilis in 2005, struggled back into favor with net-of-fee returns of 10.69%.

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Debtwire Unveils 2007 Distressed Debt Market Outlook for North America

January 9, 2006
From PR Newswire:
 Debtwire, a leading provider of market intelligence on distressed and high yield credits, in conjunction with Bingham McCutchen and Chanin Capital Partners, today announced findings on the outlook for the North American distressed debt market in 2007. This landmark survey provides unique expectations and forecasts from the top hedge funds, proprietary trading desks and other asset managers active in the distressed space.

While most traditional investors look for companies on a growth track, distressed specialists focus on the darker side of the economy. They track industries and corporations that are poised for collapse or those that have already fallen and are undervalued as a result.

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IFC to invest $50 mln in Asian distressed fund

October 26, 2006
From Reuters:
 International Finance Corp., the private sector arm of the World Bank, said on Thursday it will invest $50 million in an Asian distressed-asset fund run by Avenue Capital, which manages $12 billion worldwide.

IFC said its investment in Avenue Asia Special Situations Fund IV L.P. aims to promote a stronger credit culture in Asia and preserve jobs and capital during the restructuring or disposal of non-performing assets.

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Leading Distressed Debt Forum Showcases Cerberus, Carlyle Group, CalSTRS, Fortress, Bear Stearns, GSC Partners and More November 16 to 17, 2006, Las Vegas

October 17, 2006
From EarthTimes.org:
 The facts are clear: distressed managers control a significant percentage of this country's steel production, movie theatres, textile mills, casinos, airlines and automotive suppliers. Distressed investing continues to move from the realm of alternatives to the mainstream.

In order to address this trend, Strategic Research Institute has brought together a distinguished series of speakers who will address the top issues affecting the Distressed Debt market. Please join us November 16-17 in Las Vegas for the 8th Annual West Distressed Debt Investing Forum, part of the longest running and largest series of distressed investing conferences in the U.S.

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World's economy faces a downturn in year's time

October 17, 2006
From Leeds Today:
 Oaktree Capital – headquartered in Los Angeles and managing more than $31 billion in investment funds – believes the economy is now nearly at the top of an economic cycle.

They predict that another macro-economic event, such as terrorism, an oil shock or instability in the world credit markets, could trigger a downturn in economic conditions and a corresponding rise in 'distressed debt' opportunities.

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Distressed Debt Hits 8-Year Low

September 26, 2006
From CFO.com:
 Distressed debt has been declining since February and hit its lowest level since 1998 this month. Distress in junk bonds decreased to 3.0 percent in mid-September 15, down from 3.1 percent in August, according to Standard & Poor's Ratings Services.

A corporate bond is considered "distressed" debt if it has an interest rate that's 1,000 basis points (bps) or more over its respective Treasury benchmark. The S&P distress ratio's most recent high was in February at 5.7 percent, and averaged 6.1 percent in 2005 and 7.4 percent in 2004.

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Distressed opportunities abound

September 25, 2006
From MoneyManagement.com.au:
 Distressed debt is one prospective growth area within the private equities space identified by Standard & Poor’s (S&P) latest asset allocation report.

The report found that while the consensus view that volatility had returned to traditional equities and bonds was holding, barriers to entry and a dearth of evidence showing strong returns make indiscriminate investment in private equity a risky proposition for individual investors.

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Amazing Thailand offers a new twist for investors

September 20, 2006
From FinanceAsia.com:
 Mixed reactions to the military coup in Thailand from Asia-based distressed debt investors.

Rumours of a coup have been circulating in Bangkok for months, and so when it finally happened on Tuesday, few were taken by surprise. Ousted Prime Minister Thaksin Shinawatra was absent in New York when the Swat team entered his empty bedroom. Pricing in political uncertainty and mindful of the power vacuum, the SET last week was trading at the lowest price/earnings multiple and highest dividend yield in the region.

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Banks can appeal in Enron debt case

September 7, 2006
From Euro2Day:
 A U.S. district judge in New York is allowing some of Wall Street''s biggest investment banks to appeal an Enron Corp. court ruling that the banks said could "devastate" the country''s $500-billion distressed-debt market.
U.S. District Judge Shira Scheindlin took the unusual step of permitting the banks to immediately appeal the ruling by U.S. Bankruptcy Judge Arthur Gonzalez, who is overseeing the Enron case.

Gonzalez ruled earlier this year that holders of claims against a bankrupt company could see those claims wiped out even if they did nothing wrong in their relationship with the company. Under his ruling, holders of bankruptcy claims could be at risk if they merely bought a claim from another creditor who may have engaged in "inequitable conduct."

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Northern Trust sees more distressed debt fund action

August 25, 2006
From Reuters UK:
 More distressed debt funds are asking banking group Northern Trust for investment, a sign investors expect credit conditions to worsen, a senior private equity executive at its asset management arm said.

"There's been a big increase in the number of distressed debt funds that are coming through our shop that are looking to raise capital because of these (debt) issues," Robert P. Morgan, head of the fund of private equity funds asset management unit at Northern Trust Global Investments, said in a recent interview.

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S&P: Distressed Debt at 8-Year Low

August 25, 2006
From The Houston Chronicle:
 The ranks of U.S. businesses in serious financial trouble dwindled to an eight-year low in August, as easy credit helped them cope with rising energy prices and slower economic growth, Standard & Poor's said in a new report.

The credit-rating agency said the ratio of "distressed" corporate debt to all non-investment-grade debt shrank to 3.1 percent _ the lowest level since April 1998. S&P considers debt to be distressed when it carries yields greater than 10 percentage points above the 10-year Treasury note _ or 14.79 percent as of Friday.

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Hedge funds to challenge pre-pack value

August 17, 2006
From Financial Director:
 With growing investment in distressed businesses, hedge funds are in the prime position to challenge administrators if they believe they have failed to gain sufficient value from an insolvent company’s sale.

Deloitte reorganisation services partner Neville Kahn said these funds could be willing to cover the costs of potential litigation, as they would look to pre-packs to gain some return on their investment. 'Some with lower rating securities might say they should have got more, and then look to increase the value of their security.'

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ADM introduces its third Maculus distressed fund

August 11, 2006
From FinanceAsia.com:
 Alternative investment manager Asia Debt Management (ADM) has launched the third in its trio of hybridised private equity and distressed debt/special situations funds branded under the name Maculus.

Aimed at large institutional investors and family offices, the third Maculus fund is intended to be the biggest of the three, following in the footsteps of the first pair, which closed with $138 million and $338 million respectively. Maculus two closed in January 2006 and is currently 65% drawn down. ADM hopes to have 75% of that fund invested by September.

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United States: The Cautionary Tale Continues: Debt Acquired from Recipient of Voidable Transfer Subject to Disallowance under Section 502(d)

August 7, 2006
From Mondaq:
 In the January/February 2006 edition of Business Restructuring Review (vol. 5, no. 1), we reported on a highly controversial ruling handed down by the New York bankruptcy court overseeing the chapter 11 cases of embattled energy broker Enron Corporation and its affiliates. The court held that a claim is subject to equitable subordination under section 510(c) of the Bankruptcy Code even if it is assigned to a third-party transferee who was not involved in any misconduct committed by the original holder of the debt.

The ruling had players in the distressed securities market scrambling to devise better ways to limit their exposure by building stronger indemnification clauses into claims transfer agreements. The "buyer beware" approach articulated by Bankruptcy Judge Arthur J. Gonzalez has been greeted by a storm of criticism from lenders and traders alike, including the Loan Syndications and Trading Association ("LSTA"), the Securities Industry Association, the International Swaps and Derivatives Association, Inc. and the Bond Market Association. According to these groups, if caveat emptor is the prevailing rule of law, claims held by a bona fide purchaser can be equitably subordinated even though it may be impossible for the acquirer to know, even after conducting rigorous due diligence, that it was buying loans from a "bad actor."

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Distressed-debt holders see profit in bankruptcies

August 3, 2006
From Reuters Italia:
 Hedge funds and banks trading distressed debt in Europe could make more profit by letting companies go bankrupt to boost gains on the debt or to win a stake in the firm after restructuring, industry experts say.

"The attitude towards insolvency has changed," said Gerry Loftus, a partner at the restructuring unit of Deloitte, an accountancy firm, in London.

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Distressed and Merger Opportunities Lead Index Gains

July 10, 2006
From Black Enterprise:
 Most hedge fund strategies were positive net of fees in June, and although some returns were meager, the overall picture is in line with what hedge fund managers have been experiencing over the last year or two.

Convertible arbitrage, equity market neutral, event-driven and merger arbitrage returned less than 1% last month, while distressed securities and equity long/short funds lost 0.20% and 1.51% respectively over the same time frame.

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Goldman Sachs hires distressed company specialist

July 5, 2006
From Reuters:
 U.S. investment bank Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) has strengthened its European restructuring unit, as banks anticipate higher interest rates will lead to more companies struggling to avoid bankruptcy.

Australian native Lachlan Edwards, 39, will be based in London, reporting to Tim Flynn and Doug Henderson, the bank's co-heads of European leveraged finance, Goldman Sachs said in a statement on Wednesday.

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Hedge funds dive into distressed debt

May 18, 2006
From Global Investor:
 Hedge funds investing in distressed funds that are in liquidation has grown significantly in the past two years, mainly due to the increase in the capital managed by hedge funds and the number of distressed opportunities, according to research by Walkers, a global law firm.

Distressed funds have not had many opportunities, seeing as traditional banks don't like to lend money to fund liquidations. Typically, they only lend when there is an assurance that the borrower can make good on his or her loan. However, hedge funds have demonstrated a willing to finance such liquidations because of the potential for high returns.

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Latest Research on High Yield, Defaulted Bond, and Distressed Debt Trading Behavior to Be Presented at Leading Conference

May 18, 2006
From Yahoo! Finance:
 Strategic Research Institute's presents the 9th Annual Distressed Debt Investing Forum, scheduled for June 15-16 at the Marriott Marquis, in New York City. The facts are clear: the face value of distressed debt in the United States is estimated to exceed $600 billion; prominent and lesser known distressed managers control a significant percentage of this country's steel production, movie theatres, textile mills, casinos, airlines and automotive suppliers; over 10% of hedge funds are now at least partially dedicated to distressed debt; and limited partners allocations to distressed investments are on the rise. Distressed debt is moving from the realm of alternatives to the mainstream.

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Walkers Sees Rise in Hedge Fund Financing for Distressed Funds

May 18, 2006
From Byggaktuelt:
 Walkers, the global offshore law firm of choice for investment banks, international law firms, collateral managers, and other financial institutions, said today that the trend of hedge funds investing in distressed funds that are in liquidation has grown significantly over the past two years, due in large part to the simultaneous increase in the capital managed by hedge funds and the number of distressed opportunities.

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Distressed pre-need firm would sell plans

May 10, 2006
From inq7.net:
 THE DISTRESSED pre-need firm Pacific Plans Inc. is asking the Securities and Exchange Commission to allow it to sell more educational plans as part of its rehabilitation plan.

But holders of education plans that the company has failed to honor maintain that giving PPI a license to sell more plans is "giving them a license to get more victims."

Alfredo Non, PPI president, told the Inquirer the company applied for a license to sell education plans last December, months after the SEC suspended a PPI subsidiary's license to sell such plans.

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Under 10% are distressed firms

May 9, 2006
From The Edge Daily:
 Less than 10% of the 118 Mesdaq Market firms fall under the GN3 category of the revamped Mesdaq Market Listing Requirements (MMLR), said analysts. The MMLR, which took effect on May 8, requires distressed companies to implement and disclose comprehensive restructuring plans.

KarenSoft Technology Bhd was among the first to make a GN3 announcement to Bursa Malaysia Securities Bhd on May 9 saying it is an affected issuer. 

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Longest Running Distressed Debt Conference in the U.S. Hosts Leading Investors Halcyon Partners, Avenue Capital, Fortress Capital, and Many More

May 4, 2006
From PR Newswire:
 Strategic Research Institute's presents the 9th Annual Distressed Debt Investing Forum, scheduled for June 15-16 at the Marriott Marquis, in New York City. The facts are clear: the face value of distressed debt in the United States is estimated to exceed $600 billion; prominent and lesser known distressed managers control a significant percentage of this country's steel production, movie theatres, textile mills, casinos, airlines and automotive suppliers; over 10% of hedge funds are now at least partially dedicated to distressed debt; and limited partners allocations to distressed investments are on the rise. Distressed debt is moving from the realm of alternatives to the mainstream. 

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Dunking Distressed Debt

May 2, 2006
From Forbes:
 There may be signs of distress among distressed debt investors, driven by a lack of opportunities as fund managers scramble for new investment choices.

Hedge funds soaked up $24 billion in investments during the first quarter of 2006, according to Hedge Fund Research in Chicago, bringing the industry total to $1.18 trillion. Investments flowed into funds on the strength of equity markets and the red-hot commodities and energy markets.

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New way to play distressed companies: Acquire the stock

May 1, 2006
From post-gazette.com:
 Daniel Arbess got a call from a broker in early February pitching him shares of Riverstone Networks Inc., a Santa Clara, Calif., Internet-equipment company that had filed for bankruptcy protection the day before.

Like others willing to take a bet on troubled companies, Mr. Arbess often buys the bonds of such "distressed" companies, as they are known by professional investors.

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Three million distressed businesses revitalized

April 13, 2006
From GhanaHomePage:
 About three million small scale distressed businesses nationwide have "been sprung back to life" and are recording improved production due to assistance from the Rural Enterprises Project (REP), Nana Ato Arthur, the Deputy Central Regional Minister, said on Wednesday.

He said about three billion cedis have been disbursed as loans to about 583 of such entrepreneurs, 54 percent of whom are women, to expand their businesses.

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Fitch Releases Criteria on Distressed Debt Exchanges

April 10, 2006
From BusinessWire:
 While bankruptcy filings encompass the vast majority of defaults, the incidence of distressed debt exchanges (DDEs) is too significant to ignore, according to Fitch Ratings in a new report.

For example, in the U.S., research by Fitch recently showed that 5%-10% of all corporate bond defaults in recent years have taken the form of a DDE, which is when an issuer is essentially forced to restructure its debt obligations in an effort to avert bankruptcy or a liquidity crunch. 'Though junior creditors ordinarily bear the brunt of any loss, senior creditors can be highly adversely affected in a distressed debt exchange as well,' said Fitch Senior Director James Batterman. 'The nature of a DDE is considerably different from other types of defaults, and therefore some special handling is called for, particularly as ratings are prospective in nature.'  

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The Sunny Side of Distressed Debt

April 3, 2006
From The Street:
 With many companies in bankruptcy or facing the risk of it, hedge funds that trade in distressed debt have been busy of late. A quick look at the auto sector shows a handful of funds investing in bankrupt companies such as Dana Corp. (DCNAQ:OTC BB - commentary - research - Cramer's Take) and Delphi Corp. (DPHIQ:OTC BB - commentary - research - Cramer's Take), or betting on the future of struggling General Motors (GM:NYSE - commentary - research - Cramer's Take).

The idea is to buy securities of distressed companies at deep discounts in the hope that the investment will be worth much more after a turnaround. Katalin Kutasi heads up the distressed investing portfolio of Kellner DiLeo Cohen & Co., a $345 million hedge fund that specializes in event-driven and arbitrage strategies. She has 26 years of restructuring and distressed experience, primarily with Alliance Capital Management. In a conversation with TheStreet.com, she explains some of the basics of this poorly understood strategy. 

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Texas Pacific forms venture to raise distressed securities fund

February 23, 2006
From Bloomberg News:
 Texas Pacific Group, the buyout firm that owns stakes in Burger King Corp. and China's Lenovo Group Ltd., formed a venture to invest in securities of troubled companies, a person familiar with the matter said.

The firm started Minneapolis-based TPG Credit Management LP with former Cargill Inc. executive Rory O'Neill, 41. The venture plans to raise less than $1 billion, said the person, who declined to be identified because O'Neill is seeking investors for the private fund.

Texas Pacific, based in Forth Worth, is following rivals Carlyle Group and Blackstone Group LP into the distressed fund market, where investors bet that securities of companies will rise in value as they emerge from bankruptcy or restructuring. Moody's Investors Service expects the rate of defaults for high-yield bonds to climb by year-end to 3.3 percent from 1.9 percent in January.

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Appaloosa's Tepper Skips Distressed Debt for S&P 500 Stocks

February 21, 2006
From Bloomberg News:
 Hedge fund manager David Tepper, in a detour from his specialty of trading debt of troubled companies, made a fourth-quarter bet on the Standard & Poor's 500 Index that helped produce a return of almost 26 percent.

Tepper's Appaloosa Management LP disclosed in a regulatory filing that it bought shares of almost 70 companies in the S&P 500, including General Electric Co., Walt Disney Co. and Citigroup Inc., during the final three months of 2005. Appaloosa, which oversees about $3.7 billion for clients, took positions ranging from $500,000 to $29 million.

The investments represent a turnabout for Tepper, who made his name seeking out companies on the brink of bankruptcy and buying their bonds at pennies on the dollar. The profits logged by money managers including Tepper enticed other investors to pour about $75 billion into so-called vulture funds in the past three years, driving up prices of distressed securities. 

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Unlocking value in distressed assets

February 8, 2006
From The Financial Express:
 With a booming Indian economy, not many constituents would have spared a thought for non-performing assets (NPAs), but this market has seen a quiet and very effective transformation. Not too long ago, the NPA tag meant “non-transactable assets” for the banks and closed the door to institutional finance for sick companies. This is fast changing for deserving NPAs, with the evolution of the distressed debt and takeout finance market in India.

NPA resolution strategies adopted by Indian lenders in the 90s were limited to debt restructuring (jointly through BIFR or independently by individual lenders) and legal action under the DRT Act. One Time Settlement (OTS) options were constrained by the dual problem of lender constraints in accepting aggressive discounts and the inability of the companies to find alternate funding. Both recovery and turnaround efforts were hampered by the lack of effective bankruptcy laws and, more important, the absence of a distressed debt market which could provide an exit route for lenders or allow corporates to raise revival/growth finance.  

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Blackstone Adds to Distressed Debt Group Expertise

February 7, 2006
From BusinessWire:
 The Blackstone Group today announced the recent addition of Joseph Russick as a Principal in the Firm's Distressed Debt hedge fund. The fund was launched in July of last year with an oversubscription for its initial funding target of $500 million and is currently closed to additional capital.

Mr. Russick was previously a vice president at Bennett Restructuring Funds, a billion dollar hedge fund, where he specialized in public and private investments focused on the distressed debt of companies in or near bankruptcy. While at Bennett, he co-led the Magnatrax bank steering committee and served on the boards of Bush Industries and Syratech Corporations. He also chaired and served on various creditor committees.   

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Debtwire Unveils 2006 Distressed Debt Market Outlook for North America

January 25, 2006
From PRNewswire:
 Debtwire, a leading provider of market intelligence on distressed and high yield credits, in conjunction with Bingham McCutchen and Chanin Capital Partners, today announced findings on the outlook for the North American distressed debt market in 2006. This landmark survey provides unique expectations and forecasts from the top hedge funds, brokers and advisors active in the distressed space.

While most investors look for companies on a growth track, distressed specialists focus on the darker side of the economy. They track industries and corporations that are poised for collapse or those that have already fallen and are undervalued as a result.

Debtwire interviewed 124 of the largest players in the distressed debt market to get their perspectives on what 2006 will bring. This outlook provides a contrarian point of view to the inevitably sunny forecasts trumpeted by economists and asset managers alike at the beginning of each New Year.

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ADB, ADM Capital close fund for financially distressed companies in Asia

January 18, 2006
From AltAssets:
 The Asian Development Bank and ADM Capital have teamed up and closed a $338m fund, the ADM Maculus Fund II. The new fund will promote the recovery of financially distressed but potentially viable companies in Asia.

ADM Maculus Fund II is the second fund in the ADM Maculus series, taking the total to $476m. A third fund of $688m is planned for launch in the second quarter of 2006.

The ADM Maculus Funds focus primarily on Southeast Asian markets which are believed to harbour the equivalent of more than $800bn in non-performing loans.

Typically the ADM Maculus Funds will buy out existing creditors to initiate financial or corporate restructuring of companies that are at risk of bankruptcy due to excessive and unsustainable debt levels or financial mismanagement.

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INTERVIEW: HK Fund Raising $1B For Asian Distressed Debt

January 18, 2006
From Yahoo! Finance:
 ADM Capital of Hong Kong expects to raise over US$1 billion from investors for its funds investing in the distressed debt of Asian companies, executives said Wednesday, reflecting the growing global interest in alternative investments in the region.

The firm has just closed one US$338 million fund, and plans to launch another fund of US$688 million in the second quarter of the year. Before raising its latest fund, it had about US$1 billion under management, mostly invested in nonperforming loans and financially-distressed companies.

The surge in interest that ADM is now seeing marks a big shift from the firm's early days: it got its start in 1998, in the aftermath of the Asian financial crisis, when few investors were willing to touch the many companies that had gone bust amid the regional turmoil. This has started to change after several years of good economic growth.

"Asia has been underweight for many investors for a decade and they're now playing catch-up. There's a perception that we've seen the worst and that there's now better upside," said Robert Appleby, a director of ADM Capital, in an interview.

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US expert predicts big future for hedge funds

January 14, 2006
From China View:
 China will see a more favourable environment including more openness, liquidity and interest from the investing public - for the development of hedge funds over the next three years, predicts a US expert.

Hedge funds are a special type of mutual fund that can use one or more alternative investment strategies, including hedging against market downturns, investing in currencies or distressed securities, and utilizing return-enhancing tools such as leverage, derivatives, and arbitrage.

"Having discussed with the Chinese authorities, I believe that the consensus already seems to be developing that it is only a matter of time before hedge fund investing becomes a reality in China," said Jeffrey H Tucker, founding partner of the Fairfield Greenwich Group (FGG), a leading developer and investor in hedge funds.

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Event-Driven, Distressed Funds Lead DJ Index

January 10, 2006
From Black Enterprise:
 Dow Jones reports that event-driven strategies performed well in what was an uneventful year for the stock market in general.

Both event-driven and distressed managers pulled through to each top 6% in 2005, according to Dow Jones Hedge Fund Index officials, doing slightly better than equities. The Dow Jones Wilshire 5000 index was up 6.38% at year-end.

Last month, event-driven managers gained 1.53% and returned 6.5% net of fees for the year through Dec. 31.

Event-driven managers generally capitalize on arbitrage opportunities stemming from the market's reaction to specific transactions. An increase in merger and acquisition activity may be behind event-driven managers' success, as most did battle with lower levels of market volatility. While 2005 performance was better than most other strategies, event-driven managers did better in 2004, when they were up 10.36%.

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Most Dow Jones hedge fund indexes rose in 2005

January 9, 2006
From FX Street:
 Most hedge fund strategies tracked by the Dow Jones Hedge Fund indexes gained in 2005, with event-driven managers leading the way, according to data released Monday

But convertible-arbitrage funds lost 5.6% last year

The Dow Jones index that tracks event-driven hedge funds, which trade around specific situations, gained 6.5% last year, topping the 6.4% rise in the Wilshire 5000 index, Dow Jones said. The distressed-securities hedge fund index also beat the Wilshire 5000, gaining 6.48%, Dow Jones added. Distressed-securities funds trade the debt and stock of companies entering, emerging from or operating under bankruptcy protection from creditors

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Harbert Distressed Investment Sends Letter to NorthWestern Corporation Board of Directors

January 5, 2006
From Business Wire:
 Harbert Distressed Investment Master Fund, Ltd. today delivered the following letter to the board of directors of NorthWestern Corporation.

HARBERT DISTRESSED INVESTMENT MASTER FUND, LTD.
c/o 555 Madison Avenue, 16th Floor
New York, NY 10022

January 5, 2006

Members of the Board of Directors
of NorthWestern Corporation
NorthWestern Corporation
125 S. Dakota Avenue
Sioux Falls, SD 57104-6403

Gentlemen and Ms. Johnson:

As you know, Harbert Distressed Investment Master Fund, Ltd. ("Harbert") holds approximately 20% of the common stock and approximately 33% of the warrants of NorthWestern Corporation ("NorthWestern" or the "Company"). The Board of Directors is already aware that Harbert is profoundly dissatisfied with the actions and inactions of the Board in rebuffing various offers to buy the Company and adopting a Poison Pill which we believe are a breach of its fiduciary duty to create stockholder value and are in direct opposition to good corporate governance. We provided the Board with an outline of our thoughts in that regard in our letter dated December 15, 2005.

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