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Can someone help me understand how to go through some specific calculations for distressed debt (or point me to good resources for this)?

 

For example, lets say a company has EV of $150, secured debt of $75 and $125 of unsecured debt. Hence, the unsecured debt is trading at 60 cents on the dollar (based on expected recovery of $75 / $125). If the company goes through a debt-for-equity swap and the unsecured investor ends up recovering $25 in cash and gets $75 in equity, what would the return / yield for the unsecured debt investor be?     

2 comments 03 Sep 2020 - capital99

Hey everybody,

I currently work in the M&A group at a respectable boutique, but have the option to switch to the restructuring group given the current market situation. I find restructuring more interesting than M&A, but ultimately know that I want to go into PE; outside of firms like Apollo that have true generalist programs, and perhaps a few special sits groups, there aren't many PE firms that will truly utilize both M&A and RX skill sets.

6 comments 17 Jun 2020 - HighYieldBailBonds

Say for example on an oil & gas restructuring. What does the RX group do and what does the Oil & Gas coverage group? Or does the RX group handle this entirely on their own without any input from the oil & gas team?

I would think that if you're advising the debtor then you will need deep business expertise to plan out a business plan, which would be difficult for a generalist RX banker to have deep knowledge on, given they are generalists (obvious for a vanilla industry like retail, then it's not needed)

1 comment 15 Jun 2020 - 10x Leveraged

To any Post-MBAs who pursued a longer-term career in restructuring - I'd love to get your thoughts and insights on your career so far, whether you are happy with the decision, or have any regrets and so on. I'm about to start my MBA at a top finance school (Wharton / Booth / Columbia) this fall and would love to hear your insights on this.

From surfing WSO as well as speaking with various people, I've compiled the following pros & cons of a long term career in RX:

14 comments 10 Jun 2020 - 10x Leveraged

Looking for opinions on what kind of first internships are best/more favourable to land an IB one for the following internship? I spoke to a few people who suggested any restructuring groups while others suggested PWM. Thoughts?

8 comments 24 Apr 2020 - choppatoppa

I have a friend who just went through restructuring super day and wanted to get answers to these 5 questions:

  1. If a firm has a leverage ratio of 5x and it has an interest coverage ratio of 5x, what is the firm's interest rate?

  2. First lien 100m
    Second lien 100m
    50m EBITDA
    Multiple of 8x
    Interest expense of 8%

I’m taking the role of the second lien. What percent of equity do you need to get to receive 150% percent cash on cash return at year 4?

9 comments 12 Apr 2020 - jsg181818

Anyone here have experience interviewing lateral hires to RX from other coverage groups? What type of experience do you typically look for and how flexible are you?

Im in IB but in the REGAL coverage group. I’ve worked on a number of credit deals, but it’s always real estate credit. Would an RX group be open to someone of that background? Or would they strictly be focused on people with LevFin / DCM / O&G experience?

7 comments 10 Apr 2020 - JSmithRE2010

Any insights/thoughts on how this coronavirus madness is going to affect fall 2020 associate recruiting for MBAs (specifically for restructuring)?

Don't want to hit the panic button yet, but it seems like all the shutdowns and supply shocks will have a pretty serious ripple effect. Theoretically would this help restructuring?

4 comments 12 Mar 2020 - badmonkey5