How to value bank loan of a distressed privately held company?

Hi guys,

I'm trying to value a $1bn bank loan (due 2016) of a privately held company and I could use some help here (yeah..marketing background...). This loan is currently trading at 60c (the company's EBITDA is ~$50m)

I'm assuming I have to build a series of scenarios and see how much of the debt can be recovered. I'm thinking of the following 3 scenarios but I do not know what are the industry standards:

1) Liquidation: Assign recovery rates to assets (e.g. 0% for intangible - the company has no patents -, 85% for accts receivable...) then see how much of the capital structure the company can repay upon liquidation. Any common recovery values or things to pay attention to here?

2) Restructure debt (assume longer maturity and slightly higher interest) and forecast performance of firm assuming it can meet debt payments. What is the common method to value the debt here? Exit EBITDA multiple? DCF? I assume if e.g. EBITDA terminal year is 100 and multiple 6x, the fair value of the debt would be 60c discounted (what discount rate is usually used in distressed)

3) Convert debt into equity and forecast performance (but what debt levels do I assume now, what happens for example to bondholders? are they wiped out, or do they take equity or we restructure the bonds in the new capital structure?) Value equity company using multiples or DCF, is this the right method?

Thanks so much, this is my first time valuing distressed debt and the above is just my guess of what to do but I have no idea what is typical in the industry.