for example, XS0458566071. it is supposed to mature on 21th Oct 2019, but it is still being traded in 2020 with price of around 1 euro
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2 Answers
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The defaulted bond is a claim on the accelerated repayment of the remaining principal.
The maturity date is a non-event for a defaulted bond.
Its maturity date and the coupon rate are only useful for identifying the bond, but have no economic meaning and in general should not be used in any calculations.
Some IT systems are buggy in that they assume that something special will happen to defaulted bonds on maturity date, such as, they would magically disappear.
answered Dec 17, 2020 at 15:17
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The owner of the bond at the time of resolution of the default/bankruptcy is entitled to the recovery value. The bankruptcy proceedings may go well past the scheduled maturity of the debt obligations outstanding at the time of default. People that think the recovery value may be higher than the traded price of the bond may be looking for a gain. Also, since the bond holders are senior claims, they will likely be given equity in lieu of their claims. Investors looking to get an equity position on the emergent company may purchase the bonds.
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