Hi there,

I am looking to purchase some senior unsecured investment grade debt (Baa3/BBB-) maturing in the next four months.  I've been trying to think through the worst case scenarios, given the default risk of this investment.

If the bond defaults, it sounds like the bondholders will try to force the company into bankruptcy to get repaid, regardless if the debt is secured.  I've also heard of situations where the company will try to recapitalize to convert some of the debt to equity.

Does anyone know what happens when a corporate bond defaults?  Is there another scenario that I should be concerned about besides the bond going into default?

Thanks for any experience or information that you can share.

Regards,

Jeff