Even Goldman Sachs hasn’t been left unscathed by the carnage in the market for distressed debt this year.
The unit suffered losses on its position in Verso, a paper producer whose bonds lost two-thirds of their value this year, as well as on debt of energy companies, said the people, who asked not to be named discussing the information because it isn’t public.
Goldman Sachs’s distressed-trading desk, previously called distressed investing, is part of the firm’s credit-trading business along with investment-grade, high-yield and structured products. That unit has generated about a quarter of the bank’s fixed-income trading revenue over the past five years, or about $2.5bn a year.
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