With $1 Trillion of Distress Gone, Debt Pickers Find Scraps
Distressed debt specialists—who at one point last year had $131 billion to spend—are rummaging for increasingly elusive bargains.
Bloomberg | Apr 06, 2021
(Bloomberg)—For investment firms that profit by buying the debt of troubled companies, it looked like the opportunity of a lifetime: a $1 trillion pile of distressed bonds and loans in the Americas alone as the pandemic sent markets into meltdown last March.
But after a massive federal bailout and rock-bottom interest rates kept even some of the shakiest companies afloat, those juicy targets have shriveled to less than $100 billion. That’s left distressed-debt specialists -- who at one point last year had $131 billion to spend -- rummaging for increasingly elusive bargains. Even the real estate sector, which was hammered after the pandemic shuttered offices, hotels and stores, has managed for now to avoid an epic wipeout.