Dressed for distress. (Wall Street West).Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. has long been the financial center for players in distressed assets, going back to the late 1970s and the early days of Drexel Burnham Lambert Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was driven into bankruptcy in the 1980s by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. and the original junk bond junk bond, a bond that involves greater than usual risk as an investment and pays a relatively high rate of interest, typically issued by a company lacking an established earnings history or having a questionable credit history. crew. This reality has a curious side benefit: When many financial houses nationwide are suffering, local shops are often thriving. So it is with Beverly Hills-based Imperial Capital LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a brokerage specializing in the trading of distressed debt distressed debt Debt with low junk status and a market price substantially below par value, often pennies on the dollar. Investors sometimes buy distressed debt on the possibility that management can renegotiate loan agreements and keep the issuer out of , with some corporate finance on the side. "For us, this has not been a tough market," said Jason Reese, president of Imperial Capital. "Of course, our major emphasis is on the trading of high-yield bonds, convertible bonds and distressed bank debt." Once a bond has become distressed, institutional owners often wish to exit the investment, while others, such as vulture vulture, common name for large birds of prey of temperate and tropical regions. The Old World vultures (family Accipitridae) are allied to hawks and eagles; the more ancient American vultures and condors are of a different family (Cathartidae) with distant links to or hedge funds, want in. Imperial Capital plays broker, a good business in the last couple of years, explained Reese, what with so many sectors getting pounded. Imperial Capital has also been doing some investment banking and corporate finance, again, almost always with troubled companies that need fresh capital, or need to cut a deal with creditors, in order to survive. "It was pretty tough in the late 1990s, when everybody was making money in the dot-corn craze, and we really weren't," Reese said. "But now we seem to be doing as well as anybody." Contributing columnist Benjamin Mark Cole writes about the local investment community. He can be reached at sevencontinents@mindspring.com. |
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