Distressed Valuation

Re: Distressed Debt Model

The idea is that you want to argue to the judge what happens when the valuation is incorrect - you are unjustly enriching certain parties. The two key drivers of fulcrum are post-petition valuation and post-petition leverage, both of which impact recovery rates of the senior securities in the capita... Read More

0

by WST Expert 1.

added 10 years ago

Re: Distressed Debt Model

Ok I understand what you are saying now. However, why are only the senior notes affected? Is it b/c you are only change one class of debt simply for illustrative purposes to show what can happen to a class of security when post-petition valuation/leverage is off? I assume you can theoretically cha... Read More

0

by Guest 1.

added 10 years ago

Re: Distressed Debt Model

That was an illustrative exercise. We're teaching you how to think, not the only scenario that could occur!

0

by WST Expert 1.

added 10 years ago

Re: Distressed Debt Model

Our distressed model is not meant for evaluating HY bonds. We would suggest our regular "Core Model" which maps out cash flows and credit ratios to evaluate non-distressed high yield. Our distressed model is essentially for an imminent bankruptcy (or in bankruptcy). In addition, our Covena... Read More

0

by WST Expert 1.

added 10 years ago

Re: Distressed Debt Model

When evaluating HY bonds, the core model makes a lot of sense but shouldn't one also evaluate HY bonds from the perspective of the corporation going into bankruptcy? Shouldn't one focus much on the downside which is why I was thinking (incorrectly) tying in the distressed model as a method of evalu... Read More

0

by WST Expert 1.

added 10 years ago

Re: Distressed Debt Model

High yield bonds do not necessarily mean bankruptcy is imminent. If bankruptcy is a possibility, then yes, you need the Distressed Modeling course (fulcrum, etc) and of course Valuation, sum of the parts, liquidation, asset sale, etc. Our Covenants & Credit Agreements course is not yet availab... Read More

0

by WST Expert 1.

added 10 years ago

Re: Distressed Debt Model

In the Distressed Model, under the value tab. Hamilton highlighted cells O35:O42, the formulas are different from N35:N42. Can you please explain why the formulas suddenly changed? Secondly, with regards to debt reinstated or swapped out section under the value tab. Senior notes, went from 200 t... Read More

0

by Guest 1.

added 10 years ago

Questions/Discussions

Sort by Date ▼ / Top Rated