Opportunities in Distressed Assets and Debts: Identifying Profit in the financial crisis

The size and current state of the distressed debt market
- Lack of buyers in the market
- Market differences between Europe and the US
The main causes of stress and distress
Distressed company default rates and future forecasts
Angels that fall from investment grade
Key countries and sectors that offer opportunities
The outlook for distressed bonds compared to distressed loans
Qualitative differences across the globe
Conclusion

Macroeconomic drivers
- The impact of the credit crisis on the credit cycle
- Contributory factors
Academics and investment bankers on the same page
- Private equity practitioner forecasts
What practitioner surveys say
Conclusion

Predicting distress
- Ratio analysis
- The Z-score model
- Qualitative considerations
Initial financial analysis assessment
- Financial due diligence
  - DIP and exit financing
Legal analysis
- Legal due diligence
- Actions for fraudulent conveyance
- General priority ranking of stakeholders in the event of insolvency
Valuation models
- Relative valuation models
- Discounted cash flow valuation
- Liquidation value methodology
- Overview of valuation

Formulating a strategy for targeted returns
- Measuring returns
Equity plays for distressed or bankrupt companies and activist strategies
Direct lending to distressed companies and DIP financing
Investing in distressed company bonds and loans
- Timing, valuation and other issues
Investing in high yield bonds
- US municipal bonds and Treasuries
Passive buy-and-hold investment strategies
Arbitrage distressed securities strategies

US small and mid cap distressed investment advisor – Group G Capital Partners LLC
US hedge fund advisor on small cap bank bonds – Fortress Partners Capital Management
Western European distressed fund – BlueBay Asset Management Plc
Emerging markets hedge funds – Argo Capital Management
Case study – The Argo Fund vs. Essar Steel: making new rules for funds

The impact of the credit crunch on distressed asset private equity
- The credit crunch in emerging markets
Screening for opportunities
The importance of timing in investment decisions
Restructuring and turnaround
Compelling opportunities in distressed assets
- Emerging markets opportunities
Potential returns from distressed private equity funds
Conclusion

The structured credit and credit derivatives markets
Distressed investors in structured credit and credit derivatives markets
Strategies for distressed investors
Distressed investments in CDS
Potential investments in US and European ABS
Distressed investment in leveraged loans
Sub-prime and RMBS investment
- Legal issues for US distressed mortgage assets
- Professionals’ assessment of US government intervention
Conclusion

Figure 1.1: Moody’s global default rates, 1970–2008
Figure 1.2: Moody’s downgrade ratios, 1970–2008

Reports