Distressed Debt

Debt trading at a deep discount because the market doubts full repayment. Distressed investors buy it to earn outsized yield on a recovery, or to convert it into control of the restructured company via the fulcrum.

Go deeper

This term comes up constantly in restructuring interviews and on the desk.

Investment Banking interview prep

Related Restructuring terms

Go further than reading

The written material is free. These are the ways to get it applied to your own work.

Browse the full glossary — 150+ finance recruiting and technical terms, in plain English.