Hedge funds may be sniffing around the growing mountain of troubled European companies, picking out those they see as most likely candidates to undertake bond exchanges as a way to make money, according to market talk.

rtr1vt6iDebt-laden Dutch NXP Semiconductors NXP this week managed to cut its debt by about $465 million in an example of a debt-swap restructuring deal that has been more common in the United States up until now.

This type of deal is expected to become more prevalent in Europe now, however, as a way to salvage firms with good business models but which have been saddled with too much debt.

Hedge funds can make significant returns by buying bonds that have fallen to low double-digit prices in companies where a possible debt exchange would give them a better recovery rate on their investment.

The trick is knowing what part of the capital structure the debt exchange will be aimed at.