Re:Never Hertz to Ask
by flashyfaffe2 on Sunday June 14, 2020 @10:28AM
(#23517853)
If I rememberwell, this kind of strategy has a name called Captical structure arbitrage, where the most basic strategy is to traded convertible bonds. Most complex strategies include taking position on different asset class of the same company ( equity, bond and CDS).
Not entirely. Equity can be modelled as an option on a company’s assets, struck against its debt. This is fine for equity (and the equity component of fulcrum securities) in a bankruptcy.