Inside the Room

Poker legend Dewey Tomko built his career around asymmetry. Special situations credit investing often works the same way

Most investors still analyze Credit through spreads and ratings.

But increasingly, some of the most attractive opportunities in Credit are emerging in stressed and special situations where dispersion, refinancing pressure and restructuring dynamics create significant asymmetry.

In these situations, the real game is often played elsewhere: incentives, legal structures, negotiation dynamics and control.

This piece explores why the best credit trades are often negotiated before they are priced; and how the best managers structure deals to create asymmetric outcomes.

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