How can I value corporate bonds in default?
I have access to both reuters and bloomberg terminals.
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A holder of a defaulted bond expects to receive something of value eventually in the bankruptcy/restructuring process - one or more of maybe some cash, maybe some new debt or equity security, maybe even some derivative, e.g. a right to buy some new security at a discount later.
People who work a lot with distressed debt usually have some tools to analyze what various recovery scenarios might be worth. These estimates to not translate directly into a fair price of a defaulted bond, since no one knows which recovery scenario will be realized, but may provide some guidance for the price range in which the defaulted bond should be trading.
More practically, you just want to know where this bond, or "similar" bonds recently traded or were quoted by brokers. Similiar means defaulted bonds from the same issuer, and in the same debt tier, eg senior unsecured, "pari passou" with your bond. The old coupon and maturity date don't matter anymore. Since you have Bloomberg Terminal, look for a BVAL price for your bond, because BVAL does this. If it's not in BVAL, then there is likely not to be enough information about this bond's peers for you to replicate BVALs methodology.