medium · Corporate Credit Analysis distressed
A credit analyst is evaluating the 'structural subordination' of HoldCo debt. The OpCo has $400M of assets and $200M of external debt. The HoldCo has $100M of debt.
In a liquidation where OpCo assets are sold for 50% of book value, what is the recovery for HoldCo creditors?
- 100%
- 0%
- 50%
- 25%
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