The Outlook for Distressed Debt

Top-Notch Panel Discusses the State of Distressed Debt

On Monday, October 29, 2018, the Yeshiva University Wall Street Group (WSG), an alumni networking group organized by the Office of Alumni Affairs, presented a panel discussion titled “Outlook for Distressed Debt Ten Years After the Great Financial Crisis.” The event was hosted by Kramer Levin Naftalis & Frankel LLP.

Saul Burian ’85YC (Managing Director, Houlihan Lokey) moderated the discussion with Andrew J. Herenstein ’84YC (Managing Principal, Monarch Alternative Capital), Edward Mulé (CEO, Silver Point Capital) and Steven Tananbaum (Founding Partner & CIO, Goldentree Asset Management).

Distressed debt refers to bonds bought from companies that are either in bankruptcy or on the verge of it. These companies simply have too much debt to continue operating, which is a major cause of failure for many businesses. The companies of the three panelists buy distressed debt in order to realize a profit on their investments by returning companies to financial viability through restructuring.

In general, the discussants concluded that the outlook on realizing a profit on distressed debt depends on where companies look for their opportunities and how well they can navigate some of the volatility caused by domestic politics and international events, such as the election of Jair Bolsonaro in Brazil and the pressures on the Chinese currency.

They also had advice for those looking for a career in the industry. They acknowledged that the competition for positions is sharper than in the past but that, as always, their companies are looking for people who not only have industry knowledge but, more importantly, have exhibited entrepreneurial initiative and a willingness to learn outside their comfort zones.

Lawrence Askowitz ’87YC, co-chair of the Yeshiva University Wall Street Committee, noted that “a decade ago, the financial markets went through a terrible collapse, and the debt markets—and distressed debt in particular—had their own trajectory. Our speakers tonight were among the most successful over this decade, and their willingness to be at this WSG gathering offered us a great opportunity to hear their perspectives on what happened.”

Askowitz added that “this discussion concludes a great year of Wall Street events where we saw many industry leaders and members of our committees address our 2,500-strong network. The fact that so many industry leaders give their time to the Yeshiva University community says so much about the positive way the school is viewed on Wall Street.”

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(l-r): Saul Burian, Steve Tananbaum, Lawrence Askowitz, Andrew Herrenstein and Edward Mulé
(l-r): Saul Burian, Steve Tananbaum, Lawrence Askowitz, Andrew Herenstein and Edward Mulé