With $1 Trillion of Distress Gone, Debt Pickers Find Scraps
- Specialists in troubled companies stymied by Fed’s easy money
- So they’re turning to property loans, bankruptcy claims, Asia
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For investment firms that profit by buying the debt of troubled companies, it looked like the opportunity of a lifetime: a $1 trillion pile of distressed bonds and loans in the Americas alone as the pandemic sent markets into meltdown last March.
But after a massive federal bailout and rock-bottom interest rates kept even some of the shakiest companies afloat, those juicy targets have shriveled to less than $100 billion. That’s left distressed-debt specialists -- who at one point last year had $131 billion to spend -- rummaging for increasingly elusive bargains. Even the real estate sector, which was hammered after the pandemic shuttered offices, hotels and stores, has managed for now to avoid an epic wipeout.