You are an investment analysist at a hedge fund that is comfortable taking calculated risk. They do
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Question:
You are an investment analysist at a hedge fund that is comfortable taking calculated risk. They do invest in distressed debt. The Holdco has $10mm of assets, Opco 1 has $75mm of assets and Opco 2 has $100mm of assets. Which piece of debt would you recommend to your boss and why?
XYZ Co has the following debt outstanding:
$200mm of 4% Holdco bank debt due 10/25 that trade at par
$100mm of 8% Opco 1 senior notes due 10/22 that trade at 99
$300mm of 10% Opco 2 sub notes due 10/22 that trade at 99
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