What does it mean to Buy Debt?
I am a bit of a noob to the i-banking world (I'll admit it), but am gradually getting the hang of industry lingo. Say an investment firm buys another company's debt at a discount. First, what does this mean to buy the other company's debt? Also, I understand that buying the debt at a discount often occurs because the company who currently has the debt wants to dump it and must sell it at a discounted price if it wants to get it off its hands. However, hows does buying the debt at a discount affect the eventual return. Obviously the return has the potential to be greater, but how does face value, maturity, etc. work? Sorry if this seems elementary to some of you.