Distressed Debt Investing Ideas

Many investment banks retain a force of desk analysts that assist clients in answering questions on certain investment ideas and recommending trades to the banks clients. The arena for distressed debt in the same. Of course, buy-siders need to be wary that the respective analysts are talking their own book (i.e. the trading desk has a position, while at the same time the analysts are touting the idea). That being said, many of the desk can be a strong resource when ideas are running dry, like the situation I find myself in today.

The distressed research analysts at CSFB have always impressed me. They made a number of strong calls in 2008 which played out nicely. Earlier in the week, I received a run from our CSFB salesman on their Top Loan Picks, for the Fall, in the Distressed World. While I have not included the entire list (contact your CSFB sales rep for the message if you missed it) I will point out a few that I think are interesting and could be potential longs. As always, if we have time, we will do a case study on one or two of the ideas presented below (if you would like to contribute your ideas on any of the names mentioned below, email me). I have tried to include names that have public information, and have linked to pertinent sites, in case you want to start working:

1. Hawaiian Telecom; Hawaiian Telecom Investor Relations
2. Claire's Stores; Claire's Stores Investor Relations
3. Boston Gen (1st and 2nd lien)
4. Lear...as discussed in our Lear Case Study.
5. Federal Mogul; Federal Mogul Investor Relations
6. Las Vegas Sands; LVS Investor Relations
7. Buffets (bank debt and equity); Buffets' Bankruptcy Information

Lots of digging to do in these 7 distressed debt situations (plus the other 18 they recommended). If nothing else, investors can sharpen their pencils, and wait for names to trade off to more respectable yields.