Alternative Investments
Distressed Debt
Definition
What is Distressed Debt?
Debt of borrowers in financial difficulty, often trading at a deep discount.
Example in practice
How This Looks in Practice
An investorA person or organisation that commits capital with the expectation of a financial return. buys defaulted bonds expecting a restructuringA significant change to a company's debt, operations, ownership, or organisation intended to improve viability. recovery.
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Related Terms
Alternative Investments
Royalty Company
A company that finances producers in exchange for a percentage of revenue or output.
Alternative InvestmentsStreaming Agreement
A financing arrangement granting the investor the right to buy part of future production at a predetermined price.
Alternative InvestmentsPrivate Credit
Non-bank lending to privately held companies or assets.
Structured ProductsStructured Product
An investment combining debt and derivatives to create a defined payoff.