Hedge Funds case studies, worked step by step

Cases
100
Traced to a firm
31
Topics
13
Hard
30
Topic
All topicsCredit, distressed and capital structure7Earnings, models and KPIs8Event-driven and merger arbitrage7Fund economics, NAV and LP decisions8Global macro trades7Long pitches and valuation14Manager evaluation and attribution7Pairs and relative value5Portfolio construction and sizing7Risk limits and drawdowns7Short selling6Systematic research and data11Volatility, options and convertibles6
Level
AnyWarm upCoreHard
Source
AnyReported at a firmStandard
Showing 1–6 of 6 · filtered from 100Clear filters
  1. 001Jortan Pharma's loan caps net debt at 3.5x EBITDA. EBITDA falls 20% from Rs 500 crore to Rs 400 crore while net debt stays at Rs 1,600 crore. Is the covenant breached, and how much equity would cure it?Credit, distressed and capital structureWarm upCredit and distressed funds
  2. 014Kestava Retail bonds trade at a 450 basis point spread with leverage of 5x; Rodhan Ports bonds trade at 300 basis points with leverage of 3x. Which bond pays more per turn of leverage, and what else would you check before calling one cheap?Credit, distressed and capital structureCoreCredit and distressed funds
  3. 026Vishrant Finance's one-year commercial paper yields 11% while AAA paper of the same term yields 8%. With a 30% recovery in default, what default probability makes you indifferent between them, and how do you use that number?Credit, distressed and capital structureWarm upCredit and distressed funds
  4. 039Ovrin Chemicals' bonds trade at a 600 basis point spread, which with 40% recovery implies about a 10% annual chance of default. Its equity trades at 8x EBITDA, which looks healthy. One market is wrong. Set out the assumptions, build the capital structure trade and say how you size the two legs.Credit, distressed and capital structureHardCredit and distressed funds
  5. 064Calmor Steel is in insolvency with admitted claims of Rs 10,000 crore, Rs 8,500 crore financial and Rs 1,500 crore operational. A resolution plan offers Rs 4,000 crore against a liquidation value of Rs 3,000 crore. How might the proceeds be split, and what would a distressed buyer pay for the financial claims?Credit, distressed and capital structureHardCredit and distressed funds
  6. 076Brellin Textiles is restructuring with an enterprise value of Rs 900 crore, Rs 600 crore of secured debt and Rs 500 crore of unsecured bonds trading at 35. What does each class recover, which is the fulcrum, and what is the upside in the bonds?Credit, distressed and capital structureCoreCredit and distressed funds

Company names and figures are illustrative.