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Matt Newell's avatar

Get the strong impression that you're coming at this from an equity investing point of view. Distressed debt is not distressed equity. You should not really give a toss about how a deal with Comcast will let Xfinity subscribers watch the MLB or whatever (unless you're hoping the debt will be converted to equity that you plan to hold thereafter?). What matters to you is that recovery number. The market has decided that it doesn't believe the 3-4%, and it thinks 2% is more likely. You need to decide, based on the capital structure and an informed valuation of the assets, whether you think the market is wrong. If that sounds like too much bother, you shouldn't be investing in distressed debt.

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