SVP's Victor Khosla on Autos, Brexit and Distressed Opportunity

Victor Khosla discusses the market volatility at the end of 2018 and its implications for distressed debt investors. He highlights the differences between equity and credit markets, noting the challenges faced by companies like Ford and GE. The conversation shifts to the potential impacts of Brexit on UK companies, particularly Jaguar Land Rover, and explores investment opportunities in telecom companies like Frontier and Windstream.

What was a key characteristic of the market volatility at the end of 2018?

• A complete market recovery within a week

• A dry run similar to a real recession

• An increase in liquidity

• A rise in high yield funds

What happens when a company like Ford is downgraded from investment grade to high yield?

• Its market value increases

• Investment grade holders may start selling

• It faces increased liquidity

• Its debt becomes more attractive to investors

What is a 'fallen angel' in the context of credit markets?

• A company with no debt

• A company that has been upgraded to investment grade

• A company with increasing stock prices

• A company that has been downgraded to high yield

What is the potential impact on the high yield market if a large amount of debt is downgraded?

• The market will widen out

• The market will remain stable

• The market will absorb it quickly

• The market will shrink

How does Brexit potentially affect Jaguar Land Rover?

• It strengthens its supply chain

• It reduces its debt burden

• It causes supply chain friction

• It increases its market share

What is a significant risk for telecom companies like Frontier and Windstream?

• Decreasing cash flow

• Rapid growth in market share

• Slowly melting business model

• High valuation of assets

What investment strategy is highlighted in the final section?

• Avoiding all distressed assets

• Investing in high-growth tech companies

• Acquiring undervalued telecom assets

• Focusing on European markets