5 ms·

Can you explain how the creditors of 4bn in Neiman Marcus debt are making money off this?

• 0x8BADF00D 6y ago
  Because they won’t default now.
  • whatok 6y ago
    Ok, a potential positive sum is definitely better than zero but once again, how exactly are creditors making money off this? The grandparent's post is implying that somehow no one is losing money in this situation. I'd like to hear how it works.
• beamatronic 6y ago
  They probably sold the debt to another party
  • whatok 6y ago
    So you're saying that the original creditors made money off this and new creditors through secondary market transactions are left holding the bag? That's partially true but a massive portion of this debt is in pension funds or passive investments that track index funds. They track benchmark indices so they're buying these bonds at issue or shortly after. With no active management involved, they are also losing money when a company files.