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Strategies & Market Trends : Value Investing

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To: Jurgis Bekepuris who wrote (55728)	8/2/2015 4:19:58 PM
From: E_K_S	Read Replies (1) of 78717

Re: Distressed Senior Debt (The Value play) Marc Lasry was this week's host on Wall Street week. goo.gl It was a timely interview as he discussed the distressed Senior Debt opportunities in the Oil & Gas sector. At about 20 min into the interview he explains his strategy at buying debt at the right price ($0.40-$0.50 on the dollar) and if/when a per-structured bankruptcy may/should occur, bond holders typically will receive $0.60-$0.70 on the dollar. Lasry has a lot of experience working in the BK industry before starting his hedge fund. He is also finding distressed debt 'values' in Europe specifically w/ banks that carry too much leverage and are being "forced sellers of debt" by the ECB in order to reduce leverage amounts. His fund is on the other side of this trade, buying the debt for $0.70 on the dollar and if/when the banks restructure their loans get paid off at PAR (usually 3 years or less). He did state that if/when the restructure terms are announced, they will sell at $0.90 on the dollar for a quick return on their investment. What was interesting is his successes (70% annual return for past 6 years: 2009 & 2011 best years) were in those cases where their was panic selling (typically in the common shares). He was buying the distressed debt issues at 50% below PAR and collecting the semi annual interest payments waiting for management's pre-packaged BK offer(s). -------------------------------------------------------------------------- Mr. Lasry follows my general investment theme; Buy assets for $0.60 cents on the dollar and sell them for $0.90 cents on the dollar. In all cases (for him) there were better returns buying the distressed debt than the common shares. Buyer beware, it's still loaded w/ a lot of risk. He also talked about distressed debt for China State owned companies but to me, that sounded way to risky. EKS

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