Series 50: Distressed Securities

Taken from our Series 50 Online Guide

Distressed Securities

Distressed bonds are bonds that have dropped greatly in price. They decline usually after an issuer shows poor financial performance and the ratings agencies downgrade the bond several notches. Bonds that are in default are also considered to be distressed, but distressed securities are not necessarily in default. The market may simply believe that the issuer of the securities has a good chance of defaulting.

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