Distressed Securities

At the point when a company falls upon difficult situations and its stock and bonds fall in value, they are said to get into distressed level. These securities then, at that point, become appealing to distressed investors, usually called "vultures," who hope to gain assuming the company's fortunes move along. (What's more, a whole slew of bankruptcy legal counselors who hope to gain in the event that the company's fortunes get worse.)

Features

• The company may likewise have penetrated contracts (conditions of the security issuance), which is regularly a forerunner to the bankruptcy itself.
• Distressed securities are securities issued by a company that is close to — or amidst — bankruptcy.
• Certain high-risk investors, sometimes known as 'falcons', will invest in distressed securities in the hope of making a quick buck.