So let's say you are a distressed debt investor already, where do you go for distressed investing news? Admittedly, it took me a long time to figure out how to best stay on top of all the happenings in the distressed debt community (outside of working the phones and talking to advisers).
- I set up my Bloomberg Launchpad with lots of news panels: Now, I know not all of us are fortunate enough to have a Bloomberg. But if you do, for reference, I currently have a number of News Panels running: Forbearance Agreements / Credit Waivers, High Yield Bonds, AmendedLoans, Syndicated Loans, Distressed Corporate Bonds to name just a few. I also have one for my main monitor which shows me all new stories related to the equity and bond tickers that we own, and all the comps for the companies.
- In relation to #1 above, I always read Bill Rochelle's column on Bloomberg. I have done this every morning for over 3 years now. To access the article type in: NSE ROCHELLE ... now if you do not have a Bloomberg, you can access the stories at the Bloomberg Bankruptcy News page
- Like most people that trade / invest in corporate bonds, I get approximately 3,000 runs from brokers and dealers. A lot of time it is just noise, but every now and then something will come across the tape that adds value. Therefore, I am checking that screen intermittently. For example, on the day before Lear filed for bankruptcy, the bank debt was up 7 point on no news. Obviously something was happening behind the scenes. The equity market and the corporate market weren't really responding. If I had any balls, I would of shorted the equity (at 0.50)...and be up 50% in a day and a half.
- I read CreditSights and BondHub research pretty much every day. Now I know some people are going to moan this: "Who cares what the sell side thinks" ... well a lot of idiots do, and in my experience, idiots are pricing the market. If you do your research, and you are coming up with an EBITDA number that is materially lower than the forecasts or published research numbers, well that is a potential short candidate. In terms of news though, every now and then there might be something that missed our radar screen and an analyst will talk about it...there could (or could not) be an investment opportunity there.
- I check Pacer and various Court Dockets so many times it makes me sick: No seriously. It is such a tedious process. If anyone knows a way to automate this or wants to start a company that automates this with me, let me know. This is important because rulings move markets, new information from court filings move markets, you want to be ahead of the news.
- I know when my companies are reporting, what the consensus is, and what to do if there is any crazy price action. I know this sounds more traderesque, but if you were forecasting $100M of EBITDA in the quarter, and the company comes out with $10M what are you going to do? These are important questions in illiquid markets like the corporate and levered loan markets.