I was excited but anxious when I first joined the Special Situations Group at J.P. Morgan. It was 2008, at the height of the financial recession, and distressed investing sounded intense. To value distressed debt seemed arcane and complex. I knew financial modeling and I was hungry to learn, but what if I didn’t cut it for the job?
I felt the intensity when I took on my first project: value Chrysler’s distressed loans. I spent a year in investment banking prior to joining Special Situations, and I knew how to project financials and value a company. But how would I find out whether a distressed debt is cheap or expensive?