The COVID-19 crisis has impaired the ability of many corporate borrowers and countries to make payments under their debt obligations. Private equity and hedge fund can use debt as a strategic tool to create value for their investors through access to cheaper and more flexible debt financing; expertise in restructuring debt contracts; and access to more stable financing. The course is structured around the mechanisms of value creation through debt including deal structuring, debt restructuring, tax rules applicable to debt restructuring in different jurisdictions, investing in corporate and sovereign debt and distressed assets in general. Understanding how syndicate constituency, secondary market trading, and market conditions influence the renegotiation process requires in-depth understanding of debt markets and the legal aspects of restructuring. The overall theme is to restructure turn-around investments in overleveraged and troubled companies. Topics include: investment strategies pursued by PE investors including purchase of distressed assets, assets fire sales and taking control of the restructuring plan; loan-to-loan vs. loan-to-own investment strategies; vulture investors and the fulcrum security; dual role of PE investors as a financial sponsor and having a "say" in the reorganization plan; amended plans and the role of unsecured creditors; and sovereign debt bankruptcy provisions (i.e., collective action clauses, cross-default, pari-passu and rights upon future offer).

If a student does not meet the prerequisite requirements, s/he may take this course only if the permission of the instructor is given. An understanding of financial options will be assumed.