Referring to securities of companies experiencing severe financial difficulties, typically trading at significant discounts to face value or book value. Distressed investing involves buying these securities in hopes of recovery or restructuring gains.
From Old French destresse, from Latin districtus meaning 'pulled apart' or 'stretched tight'. The financial usage emerged in the 1980s as specialized investors began focusing on companies under financial stress.
Distressed debt investing is like being a financial vulture - you circle around dying companies, but instead of waiting for death, you're hoping for resurrection since you bought their bonds for pennies on the dollar!
Complete word intelligence in one call. Free tier — 50 lookups/day.