An airplane company, X, has two categories of bonds: senior secured bonds (A) and unsecured debt (B). Bonds A are secured on assets (e.g., airplanes) owned by X. Following the Covid crisis, the value of those assets decreased. How does this information impact your valuation of each class of debt?

Answer rating: 100% (QA)

The senior secured bonds A and unsecured debt B values of each class of debt would be affected by the decline in the value of assets owned by Company ... View the full answer