Re: Explain \"buying debt\"
well it could mean 2 things:
1) buying the liabilities of the company from creditors (literal creditors. like wholesalers that provide kmart inventory via accts receivable)
2) buying the corporate bonds (if the company is not in bankruptcy...if it is, i don't know if corporate bonds still trade or if they stop trading until the creditors work out what % they get and what is left for bondholders? and then are the bonds sold to people who could buy them?)...in this case, buying debt in terms of bonds may be evaluated as "kmart issued a bond with a 1k face value. it is now trading at $200 (aka 20% or 20 cents on the dollar). therefore buying that debt may be doing so when it is overly cheap."
i think it is the latter.
Barron
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