Distressed

“In spring, the pandemic interrupted plans among the country’s banks to shed loans still festering from the eurozone crisis a decade ago. But stimulus from central banks and governments globally has sent fresh cash into funds that buy non-performing loans, reinvigorating the efforts.” – by Margot Patrick

“So far in 2020, the pace of corporate bankruptcy filings in the U.S. has already surpassed every year since 2009, the aftermath of the global financial crisis, Bloomberg data show.” – by Eliza Ronalds-Hannon, Katherine Doherty, and Davide Scigliuzzo

“Spain scrapped the threat of forced liquidation for companies that run up major losses this year as part of a series of changes announced by the government to stave off insolvencies amid the economic turmoil caused by the coronavirus.” – by Irene Garcia Perez  

“KPMG said that certain Wirecard sales, cash holdings and customers could not be verified. And that after five months of investigation. In our opinion, this also means that Ernst & Young, as a long-time auditor, did not properly check the balance sheets. How can anyone – be it shareholders, creditors, regulators or customers – still trust this company?  […]

“A credit rating downgrade wave of historical proportions is following in the wake of economic disruption caused by COVID-19.” – by David Cox

“Though the trailing default rate in leveraged loans has remained stubbornly below its 2.9% historical average, several indicators point to increasing pressure.” – by Rachelle Kakouris

A new record: 79.6% of the $1.8 trillion in US #leveragedloan outstandings is cov-lite. That's about $940B. The bulk of that ls riskier debt, from issuers rated B and B- pic.twitter.com/cwjDI9sUvR — Leveraged Loans (@lcdnews) September 20, 2019

“89% of European HY bond deals in 2018 provided for cost savings and/or synergies to be included in EBITDA or pro-forma adjustments.” “85% of all leveraged loans in the UK were cov-lite by the end of 2018.” by White & Case

Investor trepidation towards Europe in today’s markets is understandable.  Regional macro data remain anemic.  Europe continues to produce weak data, Euro-Area economic sentiment saw its worst losing streak in a decade and low interest rates are set to continue throughout the medium term.  Meanwhile, the Fed has raised rates nine times since December 2015, taking […]

“Temporary administrators of Banca Carige said they had to find a buyer by April for the Italian bank, after unveiling a 630 million euro ($718 million) capital shortfall” – Valentina Za