The International Comparative Legal Guide to: Corporate Recovery and Insolvency 2010

“Loan-to-own” is the process by which investors buy into a piece of distressed debt (that is, debt trading at a discount because the market considers that the debt is unlikely to be repaid in full and on time) with a view either to: (i) swapping the debt for a potentially more valuable equity stake in the company; or (ii) enforcing security over the company and/or its assets, with a view to taking control of the company as part of a debt restructuring. A distressed company which is over leveraged but has a viable underlying business (good business, bad balance sheet) makes for the ideal target. Read More