View source for Distressed securities

{{Short description|Tradable investment whose subject is in distress, default, or bankruptcy}}

In [[corporate finance]], '''distressed securities''' are [[security (finance)|securities]] over companies or government entities that are experiencing [[Financial distress|financial]] or operational distress, [[Default (finance)|default]], or are under [[bankruptcy]].{{Sfn|Ineichen|2002|page=270}} As far as debt securities, this is called '''distressed debt'''. Purchasing or holding such distressed-debt creates significant [[Financial risk|risk]] due to the possibility that bankruptcy may render such securities worthless (zero recovery).{{Sfn|Barclay Hedge|2013}}

The deliberate investment in distressed securities as a strategy, while potentially lucrative, has a significant level of risk as the securities may become worthless.  To do so requires significant levels of resources and expertise to analyze each investment, the related [[going concern]] risk and assess its position in an issuer's [[capital structure]] along with the likelihood of ultimate recovery.<ref>Lemke, Lins, Hoenig & Rube, ''Hedge Funds and Other Private Funds: Regulation and Compliance,'' §1:2 (Thomson West, 2014 ed.).</ref>  Distressed securities tend to trade at substantial discounts to their intrinsic or [[par value]]{{Sfn|Ineichen|2002|page=270}} and are therefore considered to be below investment grade.{{Sfn|Ineichen|2002|page=270}}  This usually limits the number of potential investors to large institutional investors—such as [[hedge fund]]s, [[private equity]] firms, [[investment bank]]s, and specialist [[investment firm]]s such as [[vulture fund]]s.{{Sfn|Barclay Hedge|2013}}

In 2012, [[Edward Altman]], a professor emeritus at the [[New York University Stern School of Business|NYU Stern School of Business]], and an expert on bankruptcy theory, estimated that there were "more than 200 financial institutions investing between $350–400 billion in the distressed debt market in the United States".{{Sfn|Altman|2012}}

== History ==

The market developed for distressed securities as the number of large public companies in financial distress increased in the 1980s and early 1990s.{{Sfn|Hotchkiss|Mooradian|1997}} In 1992, professor Edward Altman, who developed the [[Altman Z-score]] formula for predicting bankruptcy in 1968, estimated "the market value of the debt securities" of distressed firms as "is approximately $20.5 billion, a $42.6 billion in face value".{{Sfn|Altman|2000}}{{Sfn|John|1993}} By 1993 the investment community had become increasingly interested in the potential market for distressed firms' debt.{{Sfn|John|1993}} At that time distressed securities "yielded a minimum ten percent over comparable maturity of [[U.S. Treasury bonds]]... Adding [[private debt]] with public registration rights allows private bank debt and trade claims of defaulted and distressed companies to bring the total book value of defaulted and distressed securities to $284 billion, a market value of $177 billion."{{Sfn|Altman|1992}}{{Sfn|John|1993}}

== Investment strategy ==
{{see|Private equity#Distressed securities|Valuation (finance)#Valuation of a suffering company}}
The distressed securities investment strategy exploits the fact many investors are unable to hold securities that are below [[investment grade]].{{Sfn|Ineichen|2002|page=270}}

Some investors have deliberately used distressed debt as an [[alternative investment]], where they buy the debt at a deep discount and aim to realize a high return if the company or country does not go bankrupt or experience defaults. The major buyers of distressed securities are typically large institutional investors, who have access to sophisticated risk management resources such as [[hedge fund]]s, [[private equity firms]] and units of [[investment bank]]s.{{Sfn|Barclay Hedge|2013}}{{Sfn|Steger|2013}}  Firms that specialize in investing in distressed debt are often referred to as [[vulture fund]]s.{{Sfn|Blackman|Mukhi|2010|p=49}}{{Sfn|Moore|2014}}{{Sfn|The Guardian|2011}}{{Sfn|Seager|2007}}

Investors in distressed securities often try to [[Activist investing|influence the process]] by which the issuer restructures its debt, narrows its focus, or implements a plan to turn around its operations. Investors may also invest new capital into a distressed company in the form of debt or equity.{{Sfn|Barclay Hedge|2013}} According to a 2006 report by [[Edward Altman]], a professor of finance at the [[NYU]] [[Leonard N. Stern School of Business|Stern School of Business]], distressed debt investments earned well above average returns in 2006 and there were more than 170 institutional distressed debt investors.{{Sfn|Altman|Swanson|2007}}  These institutions used "very strong and varied strategies including the traditional passive [[Buy and hold|buy-and-hold]] and arbitrage plays, direct lending to distressed companies, active-control elements, foreign investing, emerging equity purchases and equity plays during the reorganization of a firm in bankruptcy".{{Sfn|Altman|Swanson|2007}} The most common distressed securities are [[bond (finance)|bonds]] and [[loan|bank debt]].

While there is no precise definition, [[fixed income security|fixed-income instrument]]s with a [[yield to maturity]] in excess of 1,000 [[basis point]]s over the risk-free rate of return (e.g., [[Treasury security|Treasuries]]) are commonly thought of as being distressed.{{Sfn|Barclay Hedge|2013}} Distressed securities often carry ratings of CCC or below from agencies such as [[Standard & Poor's]], [[Moody's Investors Service|Moody's]] and [[Fitch Group|Fitch]].{{Sfn|Barclay Hedge|2013}}

==Risk management==
By 2006, the increased popularity in distressed debt [[hedge fund]]s led to an increase in the number of benchmark performance indexes.{{Sfn|Altman|Swanson|2007}} Highly specialized risk analysts and experts in credit are key to the success of alternative investments such as distressed debt investment. They depend on accurate market data from institutions such as [[Market (economics)|CDX High Yield Index]] and [[India]]-based Gravitas, which combines risk management software with sophisticated risk analysis using advanced analytics and modeling. They produce customized scenarios that assess the risk impact of market events. Gravitas uses [[IBM]] Risk Analytics technology (formerly Algorithmics), which is also used by major banks, to help hedge funds meet regulatory requirements and optimize investment decisions.{{Sfn|Groenfeldt|2013}}

When companies enter a period of [[financial distress]], the original [[Holding company|holders]] often sell the debt or equity securities of the issuer to a new set of buyers. Private investment partnerships such as [[hedge fund]]s have been the largest buyers of distressed securities.{{Sfn|Barclay Hedge|2013}} By 2006, hedge funds have purchased more than 25% of the high-yield market's supply to supplement their more traditional defaulted debt purchases.{{Sfn|Altman|Swanson|2007}} By 2006, "new issues rated CCC to CCC− were at an all time high of $20.1 billion".{{Sfn|Altman|Swanson|2007|page=17}} Other buyers include [[brokerage firm]]s, [[mutual fund]]s, [[private equity]] firms and specialized debt funds such as [[collateralized debt obligation|collateralized loan obligations]].

The [[United States]] has the most developed market for distressed securities. The international market, especially in [[Europe]], has become more active in recent years as the amount of [[leveraged lending]] has increased, capital standards for banks have become more stringent, the accounting treatment of [[non-performing loan]]s has been standardized, and [[insolvency law]]s have been modernized.{{when|date=September 2012}}

Typically, the investors in distressed securities must make an assessment not only of the issuer's ability to improve its operations, but also whether or not the restructuring process (which frequently requires court supervision) will benefit one class of securities more than another.

==Sovereign debt==

In 2003, Seveq observed that the emergence of the secondary debt market led to a "modern sovereign debt litigation" and the creation of an industry of "professional suers of foreign states".{{Sfn|Seveg|2003}}{{Sfn|Blackman|Mukhi|2010|p=49}}

In a 2010 article, Blackman and Mukhi examined a series of litigations employed by distressed funds investors in their lawsuits against defaulted sovereign states.{{Sfn|Blackman|Mukhi|2010|p=49}} The business plan involved buying the sovereign debt instruments at a deep discount based on a very high risk, and then attempting to enforce the full claim. The strategy is most effective when the sovereign state lacks bankruptcy protection. These investors however are constrained by "the [[sovereign immunity|sovereign-immunity]] rules that national legislatures have enacted and national courts have elaborated" to protect the vulnerable nation states from litigation.{{Sfn|Blackman|Mukhi|2010|p=49}}

While private debtors have the resource of bankruptcy protection, sovereign states do not.{{Sfn|Blackman|Mukhi|2010|p=48}} There have been "sporadic calls for a bankruptcy analogue for sovereign states" similar to the bankruptcy process for private debtors, however these calls have lacked momentum.<ref group="Notes">"When it becomes necessary for a state to declare itself bankrupt, in the same manner as when it becomes necessary for an individual to do so, a fair, open, and avowed bankruptcy is always the measure which is both the least dishonourable to the debtor, and least hurtful to the creditor." Adam Smith (1776)</ref>{{Sfn|Blackman|Mukhi|2010}}{{Sfn|Smith|1776}}{{Sfn|Krueger|2002}}

According to the [[African Development Bank Group]], at least twenty [[heavily indebted poor countries]] in Africa have been threatened with or subjected to legal actions by commercial creditors and hedge funds since 1999.<ref>{{cite web|title=Vulture Funds in the Sovereign Debt Context|url=http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/african-legal-support-facility/vulture-funds-in-the-sovereign-debt-context/|publisher=African Development Bank Group|access-date=28 July 2014}}</ref>

===Zambia===
In 1999, the US firm Donegal International purchased $40 million of [[Zambia]]n debt owed to [[Romania]] for the "discounted purchase price" of $3.2 million. In 2007, a British high court granted the company "permission to enforce a claim for tens of millions of dollars against the [[Government of Zambia]]".

===Liberia===
In 2009, a British court awarded $20&nbsp;million to hedge funds suing [[Liberia]]. Before the hedge funds could collect their money, the Debt Relief (Developing Countries) Act 2010<ref>{{cite web|url=http://www.legislation.gov.uk/ukpga/2010/22/pdfs/ukpga_20100022_en.pdf |title=Debt Relief (Developing Countries) Act 2010 |access-date=2014-07-28}}</ref> was passed in the [[UK parliament]] in 2010 after Liberian president and 2011 [[Nobel Peace Prize]] winner [[Ellen Johnson Sirleaf]] appeared on the BBC ''[[Newsnight]]'' program for the hedge funds to "have a conscience and give this country a break".<ref>{{cite news|last=Jones |first=Meirion |url=http://news.bbc.co.uk/1/hi/programmes/newsnight/8610062.stm |title=Newsnight - UK stops 'vulture funds' picking on poor |work=BBC News |date=2010-04-08 |access-date=2013-10-15}}</ref>

That act caps what the hedge funds can collect, they had to settle with Liberia for just over $1&nbsp;million, and effectively prevents them suing for exorbitant amounts of money in United Kingdom courts. Nick Dearden of the [[Jubilee Debt Campaign]] said of the change, "It will mean the poorest countries in the world can no longer be attacked by these reprehensible investment funds who grow fat from the misery of others". The law was made permanent in 2011 but there are still havens for this activity, such as the [[Channel Islands]] and the [[British Virgin Islands]].<ref>{{cite news|url=https://www.theguardian.com/global-development/2011/nov/15/vulture-funds-how-they-work |title=Vulture funds—how do they work?|work=The Guardian |access-date=2013-10-15 |location=London |date=15 November 2011}}</ref>

===Congo===
[[FG Hemisphere]] of Brooklyn, sued [[Democratic Republic of the Congo]] for a debt from [[Yugoslavia]] in the 1970s, which it had picked up for $3.3 million. FG sued in [[Hong Kong]], [[Australia]], and [[Jersey]], which was not covered by the [[UK law]] against hedge funds involved in sovereign debt. The [[Government of the People's Republic of China|Chinese government]] blocked the attempt to sue in Hong Kong but the Jersey court awarded $100&nbsp;million to FG. A series of attempts were then made in Britain and the United States by organizations such as [[Jubilee USA Network]], [[Oxfam]] and the Jubilee Debt Campaign to change the laws so that hedge funds would not be able to collect on their awards. The [[Jubilee Debt Coalition]]'s Tim Jones traveled to Jersey in November 2011 to ask the government to ban hedge funds involved in sovereign debt. He told ''[[The Guardian]]'' that the Democratic Republic of the Congo "desperately needs to be able to use its rich resources to alleviate poverty, not squander them on paying unjust debts".<ref>{{cite news|url=https://www.theguardian.com/global-development/2011/nov/15/vulture-funds-jersey-decision |title=Vulture funds await Jersey decision on poor countries' debts|work=The Guardian |location=London |access-date=2013-10-15 |first1=Greg |last1=Palast |first2=Maggie |last2=O'Kane |first3=Chavala |last3=Madlena |date=15 November 2011}}</ref>

When FG's owner Peter Grossman was doorstepped by freelance reporter [[Greg Palast]] and asked whether he thought it was fair to take $100 million for a debt he had paid $3&nbsp;million for, he responded, "Yeah I do actually…I'm not beating up the Congo. I'm collecting on a legitimate claim".<ref name=july18bbc>{{cite news|last1=Jones|first1=Meirion|title=Vulture fund's $100m DR Congo claim blocked|url=https://www.bbc.com/news/business-18894874|work=BBC News|date=18 July 2012}}</ref>

FG Hemisphere is attempting to enforce an ICC arbitration award for $116&nbsp;million owed by the [[Democratic Republic of Congo|Democratic Republic of the Congo]]. The award was originally issued by an arbitral panel of the [[International Chamber of Commerce]] (ICC) in favor of [[Energoinvest]] DD of [[Bosnia]] in the amount of $39&nbsp;million and then sold to FG&nbsp;Hemisphere.<ref>{{cite news|last=Stewart|first=Heather|title=Vulture fund swoops on Congo over $100m debt|url=http://www.mathaba.net/go/?http://www.guardian.co.uk/world/2009/aug/09/congo|archive-url=https://web.archive.org/web/20140530080419/http://www.mathaba.net/go/?http://www.guardian.co.uk/world/2009/aug/09/congo|url-status=usurped|archive-date=May 30, 2014|access-date=5 March 2013|work=The Guardian|date=8 August 2009}}</ref> The award had been issued by the ICC in respect of unpaid construction contracts pursuant to which Energoinvest supervised construction of high-tension power lines, which are still in service, for transmission of power from the [[Inga–Shaba HVDC|Inga–Shaba dam]] in the Congo—then known as Zaire.

===Peru ===
In 1983, [[Peru]] was in economic distress and had large amounts of external debt. In 1996, the nation restructured its debts. The original loans were exchanged for [[Brady Bonds]], dollar-denominated bonds issued in the original amount of the loans. [[Paul Singer (businessman)|Paul Singer]]'s [[Elliott Associates]], a New York-based hedge fund, purchased $20.7 million worth of defaulted loans made to Peru for a discounted price of $11.4 million. Elliott Associates, holding the only portion of Peru's debt remaining outside the restructure, sued Peru and won a $58 million settlement. Unable to pay the $58 million, Peru, continued to repay creditors that held Brady Bonds. Elliott filed an injunction to prevent Peru from paying off its restructured debt without also paying Elliott. It was argued that Peru violated the "[[pari passu]]" clause, which states that no creditor can be given preferential treatment.

===Argentina ===
In 2001, [[Argentina]] [[December 2001 riots in Argentina|defaulted]] on roughly $81 billion. NML Capital, LTD., a hedge fund that is a subsidiary of [[Elliott Management Corporation]], purchased Argentine debt on a [[secondary market]] for a lower price. Ninety-two percent of creditors restructured in 2005 and 2010 for roughly $0.30 on the dollar.<ref>{{cite news|last=Moffett|first=Mathew|title=Argentina Releases Debt-Swap Details|url=https://www.wsj.com/articles/SB10001424052702303950104575185772669803524?mod=googlewsj|access-date=5 March 2013|work=The Wall Street Journal|date=April 16, 2010}}</ref> NML Capital rejected the proposal and sued Argentina for the full amount in New York State courts. NML Capital's main argument is that the "[[pari passu]]"—[[Latin]] for "on equal footing"—clause in the original contract requires Argentina to pay back all of its creditors, including those who did not agree to restructure, if it paid back one creditor.<ref>{{cite web|title=The pari passu clause and the Argentine case | url = http://www.allenovery.com/SiteCollectionDocuments/The%20pari%20passu%20clause%20and%20the%20Argentine%20case.pdf|work=Overy and Allen Global Law Intelligence Unit|publisher=Web|access-date=5 March 2013}}</ref> Since Argentina had already begun to repay the creditors that restructured, Elliot argued that it also deserved to be paid back.

On October 2, 2012, [[NML Capital Limited|NML Capital Ltd.]], a hedge fund based in the [[Cayman Islands]], which held Argentine debt not included in [[Argentine debt restructuring]],<ref name="[2010] EWCA Civ 41">{{cite web|title=Republic of ''Argentina v. NML Capital''|url=http://www.bailii.org/ew/cases/EWCA/Civ/2010/41.html|publisher=Royal Courts of Justice|access-date=October 19, 2012|date=April 2, 2010}}</ref> impounded the ''[[ARA Libertad (Q-2)|Libertad]]'', an Argentine Navy training ship in [[Tema]], [[Ghana]]. The Ghanaian court held that Argentina had waived sovereign immunity when it contracted the [[sovereign debt]] being enforced.<ref name=NYT101812>{{cite news|title=Seizure of Ship From Argentina Forces Shake-Up|url=https://www.nytimes.com/2012/10/19/world/americas/seizure-of-argentine-ship-forces-shake-up.html|access-date=October 19, 2012|work=The New York Times|date=October 19, 2012|author=Emily Schmall}}</ref>

In November 2012, the New York State Court ruled in favor of Elliot and the other holdouts on the merits of the ''pari passu'' argument, and ordered Argentina to pay $1.3 billion on December 15—the very same date that Argentina was supposed to pay the creditors who had agreed to the restructure. An appeals court heard oral arguments on February 27, and in June 2014, the [[U.S. Supreme Court]] rejected Argentina's appeal.<ref name="au.finance.yahoo.com">[https://au.finance.yahoo.com/news/argentina-makes-debt-case-us-063530886.html "Argentina makes debt case in US newspapers"], AFP wire, June 23, 2014</ref> The [[Center for Economic and Policy Research]] reported on an [[Organization of American States]] special meeting on July 3, 2014, among foreign ministry officials, in [[Washington, D.C.]], to discuss the situation. The resolution was passed with the support of all OAS member states other than the United States and Canada.<ref>Main, Alexander, [http://www.cepr.net/index.php/blogs/the-americas-blog/us-on-its-own-once-again-at-oas-meeting-on-argentinean-sovereign-debt "U.S. on Its Own, Once Again, at OAS Meeting on Argentinean Sovereign Debt"] {{Webarchive|url=https://web.archive.org/web/20140714131501/http://www.cepr.net/index.php/blogs/the-americas-blog/us-on-its-own-once-again-at-oas-meeting-on-argentinean-sovereign-debt |date=2014-07-14 }}, CEPR website, July 9, 2014</ref>

In July 2014, a U.S. federal judge ruled in favor of NML Capital Ltd., a unit of Michael Sheehan's Elliott Management, against [[Argentina]]. The country owes its creditors more than $1.3 billion.{{Sfn|Slater|2014}} According to Mark Weidemaier, a law professor at the [[University of North Carolina]], the ruling was one of "the most significant litigation victories that a holdout creditor has ever achieved" in the realm of sovereign debt.{{Sfn|Slater|2014}} A July 2014 article in ''[[The Wall Street Journal]]'' by [[Georgetown University|Georgetown]] [[Georgetown University Law Center|Law professor]] Adam J. Levitin argued that the relationship between distressed securities investors and the U.S. court system should be revisited. He claimed that while these distressed debt [[investment funds]] can choose to "play the game" and "put their head in the mouth of the [[Leviathan]]", the U.S. courts should not choose to.{{Sfn|Levitin|2014}}

== See also ==
{{div col}}
*[[Business valuation#Option pricing approaches]]
*[[Credit risk]]
*[[Default (finance)]]
*[[High-yield debt]]
*[[Private equity]]
*[[Financial statements]]
*[[Traditional investments]]
*[[Vulture fund]]
{{div col end}}

== Notes ==
{{Reflist|group="Notes"}}

==Citations==
{{Reflist|2}}

==References==

* {{citation|last=Altman |first=Edward I. |date=April 1990 |title=The Altman-Foothill Report on Investing in Distressed Securities: The Anatomy of Defaulted Debt and Equities |publisher=Foothill Corporation }}  This report was the basis so Altman's 1991 publication entitled ''Distressed Securities.'' 
* {{citation|last=Altman |first=Edward I.  |title=The Market for Distressed Securities and Bank Loans |date=October 1992 |work=Foothill Corporation |location=Los Angeles |access-date=29 July 2014 |url=http://pages.stern.nyu.edu/~ealtman/dynamics.pdf }} Altman was commissioned by The Foothill Group to prepare a series of "White Papers" on Distressed Debt Markets in 1990 and 1992.
* {{cite journal  | last = Altman  | first = Edward I.  | author-link = Edward I. Altman  | title = Predicting Financial Distress of Companies  | url= http://pages.stern.nyu.edu/~ealtman/Zscores.pdf | pages = 15–22  | date = July 2000 |access-date=28 July 2014 }}
* {{citation|last=Altman |first=Edward I. |year=2002 |title=The Market for Distressed Securities and Bank Loans, the Altman-Foothill Report II |location=Los Angeles }}
* {{cite report|publisher=New York University Salomon Center, Leonard N. Stern School of Business|series=Special Report|title=The Investment Performance and Market Size of Defaulted Bonds and Bank Loans: 2006 Review and 2007 Outlook|first1=Edward I. |last1=Altman|first2=Jeffrey |last2=Swanson|date=February 2007|url=http://pages.stern.nyu.edu/~ealtman/2006%20InvestPerf.pdf|location=New York}}
* {{citation|title=Testimony before the ABI Chapter 11 Reform Commission | last = Altman  | first = Edward I. | date = 17 October 2012 |access-date=28 July 2014 |url=http://commission.abi.org/sites/default/files/statements/17oct2012/Testimony_ABI_2012_Conference.pdf }}
* {{citation|title=The Role of Distressed Debt Markets, Hedge Funds and Recent Trends in Bankruptcy on the Outcomes of Chapter 11 Reorganizations |url=http://people.stern.nyu.edu/ealtman/The%20Role%20of%20Distressed%20Debt%20MarketsDec03-2013.pdf |first1=Edward I. |last1=Altman |date=3 December 2013 |access-date=31 July 2013 }}
* {{cite journal |title=The Evolution of Modern Sovereign Debt Litigation: Vultures, Alter Egos, and Other Legal Fauna |journal=Law and Contemporary Problems |year=2010 |last1=Blackman |first1=Jonathan I. |last2=Mukhi |first2=Rahul |volume=73 |pages=47–61 |url=http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3545&context=lcp |access-date=30 July 2014  }}
*{{cite web|url=http://www.barclayhedge.com/research/educational-articles/hedge-fund-strategy-definition/hedge-fund-strategy-distressed-securities.html|title=Understanding Distressed Securities|work=Barclay Hedge|year=2013|access-date=28 July 2014|ref={{SfnRef|Barclay Hedge|2013}}}}
*{{citation |url=http://finance.fortune.cnn.com/2012/03/26/paul-singer-mitt-romney |work=CNN Money |title=Mitt Romney's hedge fund kingmaker |first=Michelle |last=Celarier |date=26 March 2012  |access-date=28 July 2014 |archive-url=https://web.archive.org/web/20130402223527/http://finance.fortune.cnn.com/2012/03/26/paul-singer-mitt-romney/ |archive-date=2 April 2013 |url-status=dead }}
* {{citation |url=http://www.debtadvisory.com/about_dai/executive_team.html |title=Executive team |work=Debt Advisory International (DAI) |date=nd |access-date= 29 July 2014 |ref={{SfnRef|Debt Advisory International (DAI)|nd}}}}
* {{citation |year=1997 |first1=Edith |last1=Hotchkiss |first2=Robert |last2=Mooradian |title=Vulture investors and the market for control of distressed firms |journal=Journal of Financial Economics |volume=43 |issue=3 |pages=401–443 |url=https://www2.bc.edu/~hotchkis/papers/vulture.pdf  |doi=10.1016/s0304-405x(96)00900-2 |access-date=2014-07-31 |archive-url=https://web.archive.org/web/20160304103946/https://www2.bc.edu/~hotchkis/papers/vulture.pdf |archive-date=2016-03-04 |url-status=dead }} This article investigated the role of vulture investors in a sample of 288 US firms that defaulted on their public debt from 1980-1993. 
*{{citation|url=https://www.questia.com/read/1G1-14793581 |title=Managing Financial Distress and Valuing Distressed Securities: A Survey and a Research Agenda |work= |last=John |first=Kose |date=22 September 1993 |access-date= }}{{dl|date=July 2021}}
* {{citation|first=Anne O. |last=Krueger |title=A New Approach to Sovereign Debt Restructuring |work=International Monetary Fund |location=Washington, D.C. |date=April 2002 }}
*{{cite news|first=Tom|last=Groenfeldt|date=24 June 2013|title=Distressed Debt Fund Monitors And Hedges Its Risks For Low Volatility|url=https://www.forbes.com/sites/tomgroenfeldt/2013/06/24/distressed-debt-fund-monitors-and-hedges-its-risks-for-low-volatility|access-date=8 August 2013|work=Forbes }}
*{{cite book |title=Absolute Returns: the risks and opportunities of hedge fund investing |first=Alexander M. |last=Ineichen |year=2002 |publisher=John Wiley & Sons |isbn=0-471-25120-8 |pages=528  |url=https://archive.org/details/absolutereturnsr0000inei |url-access=registration }}
* {{cite book | title= Hedge Funds and Other Private Funds: Regulation and Compliance | last1= Lemke | first1= Thomas P. | last2= Lins | first2= Gerald T. | last3= Hoenig | first3= Kathryn L. | last4= Rube | first4= Patricia S. |year= 2014|publisher= Thomson West | ref= lemke, lins, hoenig, rube }}
* {{citation|first=Adam |last=Levitin |url=https://blogs.wsj.com/bankruptcy/2014/07/29/the-examiners-adam-levitin-on-argentina-and-distressed-investors/ |series=The Examiners |title=Adam Levitin on Argentina and Distressed Investors |date=29 July 2014 |access-date=30 July 2014 |work=The Wall Street Journal }}
* {{citation|url=http://america.aljazeera.com/articles/2014/3/22/the-end-of-vulturefunds.html |title=The end of vulture funds: Businessmen call them 'distressed debt' investments. Critics say they exploit poor countries |date=22 March 2014 |access-date=29 July 2014 |last=Moore |first=Jina |location=Lusaka, Zambia }}
* {{cite news| url=https://www.theguardian.com/global-development/2011/nov/15/vulture-funds-key-players?intcmp=122 | work=The Guardian| title=Vulture funds – the key players| date=15 November 2011|access-date=10 June 2012 | location=London, UK |ref={{SfnRef|The Guardian|2011}}}}
* {{citation|title=Court cuts vulture fund's claim: Zambia's debt repayment reduced by $40m; Judge says much of firm's evidence was dishonest |first=Ashley  |last=Seager |newspaper=[[The Guardian]] |date=25 April 2007 |access-date=29 July 2014  |url=https://www.theguardian.com/business/2007/apr/25/debt.development }}
* {{citation|first=Alon |last=Seveg |title=Investment: When Countries go Bust: Proposals for Debtor and Creditor Resolution |series=Asper Review |journal=International Business and Trade |year=2003 |volume=25 }}
* {{cite news|url=https://www.forbes.com/profile/paul-singer/ |title=Paul Singer |work=Forbes |date=18 April 2012 |access-date=28 July 2014 |ref={{SfnRef|Forbes|2012}}}}
*{{cite news|url=https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20140728/RBIBARGENTINAFINAL |title=Paul Singer's determined stance |date=8 July 2014 | first=Joanna |last=Slater |work=Globe Advisor |access-date=28 July 2014 }}
* {{citation|last=Smith |first=Adam|year=1776 |title=Wealth of Nations }}
*{{cite news|title=Distressed-Debt Investors Eye Asia|url=https://blogs.wsj.com/moneybeat/2013/08/07/distressed-debt-investors-look-toward-asia/?mod=e2tw|work=The Wall Street Journal|date=7 August 2013|access-date=8 August 2013 |first=Isabella |last=Steger}}
*{{cite web | title=Group Overview | work=Suncorp|ref={{SfnRef|Suncorp|2014}}}}

==Further reading==
*{{citation |last=Altman |first=Edward I. |year=1991 |title=Distressed Securities |publisher=Probus Publishing |location=Chicago}}
*{{cite book |first1=Henry F. |last1=Owsley |first2=Peter S. |last2=Kaufman |title=Distressed Investment Banking: To the Abyss and Back |publisher=Beard Books |year=2005 |isbn=1-587-98267-6 |url=https://archive.org/details/distressedinvest00henr }}
*{{cite book | first=Stephen G. | last=Moyer | title=Distressed Debt Analysis: Strategies for Speculative Investors | publisher=J. Ross Publishing | year=2004 | isbn=1-932-15918-5 | url=https://archive.org/details/distresseddebtan00moye }}
*{{cite book | first1=Martin J. |last1=Whitman |first2=Fernando |last2=Diz | title=Distress Investing: Principles and Technique | url=https://archive.org/details/distressinvestin00whit | url-access=registration | publisher=John Wiley & Sons | year=2009 | isbn=978-0-470-48865-2}}
* {{citation |last=Rosenberg |first=H. |title=The Vulture Investor |publisher=Wiley and Sons Inc. |location=New York |year=1992}}

==External links==
* [http://www.barclayhedge.com/research/educational-articles/hedge-fund-strategy-definition/hedge-fund-strategy-distressed-securities.html Understanding Distressed Securities]
* [https://web.archive.org/web/20040229214703/http://vcexperts.com/vce/library/encyclopedia/glossary_view.asp?glossary_id=287 Distressed Debt Articles] from VCExperts.com

{{Corporate finance and investment banking}}
{{hedge funds}}

[[Category:Fixed-income securities]]
[[Category:Debt]]