Distressed securities

Definition

A security of a firm that has declared or is about to declare bankruptcy. In the context of hedge funds, a style of management that focuses on securities of companies that have declared bankruptcy and may be undergoing reorganization. Investment holdings can include bonds as well as stock in these firms.

Investing Essentials

Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University


Term of the Day

Registration
In the securities market describes process set up pursuant to the Securities Exchange Acts of 1933 and 1934 whereby securities that are to be sold to the public are reviewed by the SEC.

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