You are an investment analysist at a hedge fund that is comfortable taking calculated risk. They do invest in distressed debt. The Holdco has $10mm of assets, Opco 1 has $75mm of assets and Opco 2 has $100mm of assets. Which piece of debt would you recommend to your boss and why?

XYZ Co has the following debt outstanding:

$200mm of 4% Holdco bank debt due 10/25 that trade at par

$100mm of 8% Opco 1 senior notes due 10/22 that trade at 99

$300mm of 10% Opco 2 sub notes due 10/22 that trade at 99

Answer rating: 100% (QA)

Heres an analysis of the XYZ Co debt options for your hedge fundconsidering your comfort with calculated risk and distressed debt Option 1 200mm Holdc... View the full answer