medium · Corporate Credit Analysis cap-structure

Sentinel US Inc. is a subsidiary of Sentinel plc. Sentinel US has issued $600M in unsecured notes. Sentinel plc has issued $500M in HoldCo notes.

If the US subsidiary defaults and its assets are valued at $400M, and no parent guarantees exist, what is the recovery for the HoldCo notes?

  1. 100%
  2. 80%
  3. 0%
  4. 66%

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