Financial Restructuring


Expert reporting and in-depth analysis on firms facing the need for financial restructuring with a focus on the complexities of each case. Our coverage dives deep into different types of restructurings including corporate restructuring, mergers and consolidations, recapitalizations and post-reorganization insight.

Unpacking Ardagh: Will Metal Business Equity Help Solve Multi-Currency Maturity Wall, or Be Upstreamed?
Tue Feb 27, 2024 4:51 pm Distressed Debt  Financial Restructuring

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Join Reorg on Thursday, March 7, at 10 a.m. ET / 3 p.m. GMT as we discuss how Ardagh Group might approach its $3.2 billion of secured debt maturities in 2025 and 2026, with an eye on how it might utilize its stake in Ardagh Metal Group and a focus on the flexibility contained in its debt covenants. 

In addition, we will discuss how Ardagh’s actions could affect the PIK toggle notes issued by ARD Finance, the ultimate parent company.

Chiara Elisei, chief credit correspondent, EMEA, will moderate the webinar, and the presenters include:

  • Bart Capeci, senior covenants analyst, EMEA 
  • Jeremy Sherby, distressed debt analyst, Americas
  • Mike Axon, senior high-yield credit analyst, Americas
  • Robert Schach, editor, EMEA

Attendees will be invited to submit questions during the webinar or send them in advance via email to marketing@reorg.com.

Register for the webinar.

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EMEA Distressed Debt Wrap 2023

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Drying Liquidity, Looming Maturities in Tense Geopolitical Environment to Drive Restructuring Uptick in 2024 After Slow Burning 2023; More ‘Holistic’ Workouts Expected

After years of “waiting for the wave,” 2024 might be the time when activity in the restructuring market may finally pick up. Wars in Ukraine and the Middle East, U.S. elections and weakening Chinese growth paint a testing picture for the world economy. Well-known challenges such as higher-for-longer interest rates, near-zero economic growth in Europe and a cost-of-living squeeze entering its third calendar year all add to the possibility of an animated year on the distressed debt front, despite the current strength of the high-yield bond market.

Last year, restructuring negotiations often revolved around the size of the new money check sponsors had to write for lenders to agree to amend-and-extend deals. Shareholders no longer able to reinvest were forced to hand over the keys to creditors, resulting in a rise in debt-for-equity swaps.

The companies that avoided operational issues still had access to debt capital markets, but with key interest rates staying elevated, the price often doubled compared with cheap pre-pandemic debt.

“Looking ahead, the number of structures facing debt maturities in the next couple of years is significantly higher than last year. Many cap stacks, which would previously have achieved a refinancing or pretty easy amend and extend, will find such pure balance sheet solutions harder to come by. More holistic restructurings, including operational restructurings, will be required to bring interest costs and leverage levels to a sustainable quantum,” Helena Potts, financial restructuring partner at Paul Hastings told Reorg.

According to various data providers, including Reorg’s own data, there are approximately €76.5 billion of high-yield bonds maturing in 2024 and 2025. Although the maturity wall is weighted toward 2025, there is still significant work to be done on the €24.5 billion of notes due in 2024.

Potts added that in 2023 companies faced a series of interest rate hikes, and as yet, those with significant reserves have not felt too challenged by the impact on their cash balances. But cash reserves are becoming more constrained, particularly in the mid-market sector. “Across all capital structures there is an absence of early warning signals for lenders and this can lead to situations becoming sub-optimal for all stakeholders, as there is not sufficient time to find rescue packages where the liquidity road just runs out,” she said.

Unlock comprehensive insights by downloading the 2023 Restructuring wrap now and delve into the complete report.

For more reports and guides by Reorg, please click here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

To keep up on the latest coverage with Reorg, follow Reorg on LinkedIn and X.

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EMEA Litigation Wrap 2023
Fri Feb 9, 2024 11:05 am Covenants Analysis  Financial Restructuring

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Restructuring Plans Challenged; FCA Creates Hurdles for Schemes and Gibbs Here to Stay

Reorg has analyzed the key restructuring and insolvency litigation from 2023 and distilled the key takeaways.

Key New Guidance From 2023

Court of Appeal Examines Part 26A After Creditor Challenge: Undue Pressure, Valuation, Restructuring Surplus Considered

  • This is the first Part 26A to go to the Court of Appeal. Under the original plan pari passu ranking creditors were given different treatment.
  • A successful appeal will provide a precedent for equal treatment of creditors with equal rights under a plan, regardless of cross-class cramdown.
  • Following the sanctioning of Adler’s Plan in the English High court, challenging creditors have sought to challenge the plan and have it set aside by the Court of Appeal with the hearing raising several issues:
    • (i) The pressure expedited sanction hearings placed on the court, especially in the context of valuation disputes;
    • (ii) The question of who gets to dictate how the restructuring surplus is shared; and
    • (iii) Whether there should be a framework to structure the court’s discretionary power to sanction a plan.
  • The European restructuring industry keenly awaits judgment from the English Court of Appeal on this. Lord Justice Snowden is expected to deliver the main judgment in the coming weeks.

Unlock comprehensive insights by downloading the 2023 Litigation wrap now and delve into the complete report.

For more reports and guides by Reorg, please click here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

To keep up on the latest coverage with Reorg, follow Reorg on LinkedIn and X.

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Ukraine Webinar: What’s Next for Kyiv’s Creditors?
Thu Feb 8, 2024 12:49 pm Distressed Debt  Financial Restructuring

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Join Reorg on Wednesday, Feb. 21, as we discuss:

  • Ukraine’s upcoming sovereign debt restructuring;
  • Resilience in Ukraine’s economy; and
  • The international work to seize Russian state assets.

Panelists:

You can find recent coverage on Ukraine credits here.

Attendees can submit questions during the webinar or email them in advance here.

Webinar details:

  • When: Wednesday, Feb. 21, at 2 p.m. GMT/3 p.m. CET.
  • Registration: To register for the webinar, click here. Please register using your business email address.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

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CEEMEA Credit Wrap 2023
Wed Jan 24, 2024 11:06 am Distressed Debt  Financial Restructuring

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Patience Pays Out in Corporate Distress but Sovereign Restructurings Prove Hard to Unlock

After a bruising 2022 dominated by Russia’s full-scale invasion of Ukraine, 2023 has been a lucrative year for the brave investors who ventured into distressed Ukrainian credits and certain special situations. A number of the high-profile issuers adopted a creditor-friendly approach allowing for several 40 to 45 point recoveries during the year.

The 2023 macroeconomic backdrop for high-yield borrowers in CEEMEA has been challenging to say the least – particularly on interest expenses. The U.S. base rate on which CEEMEA companies typically pay a 5% to 10% premium had soared from a comfortable 25 bps before Moscow’s invasion in 2022, to 450 bps by the start of 2023. The new interest cost reality meant many CEEMEA issuers stepped away from the wider capital markets, seeking tailored funding solutions at survivable rates instead.

Ukrainian grain and poultry producer MHP raised $400 million in fresh development finance in September to buy back its $500 million 7.75% 2024 bonds, which are currently trading in the mid-90s, 45 points higher than in January. In its second buyback attempt launched this week, MHP is offering investors 95 cents on the dollar, up from 85 cents in the first tender.

Meanwhile in Russia, eurobond issuers have endured their first full year locked out of Western capital markets following the unprecedented 2022 sanctions. Routine dollar refinancings for strong commodity exporters are now off the table and even Russian cash redemptions struggle to make it through the blocked payment systems. Several companies with multi-billion dollar capital structures have ceased reporting altogether. In June, Reorg hosted a webinar on the impact of sanctions in distressed situations and debt restructuring.

Unlock comprehensive insights by downloading the CEEMEA Credit Wrap 2023 now and delve into the complete report.

For more reports and guides by Reorg, please click here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

To keep up on the latest coverage with Reorg, follow Reorg on LinkedIn and X.

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EMEA Schemes/26A Wrap 2023
Mon Jan 22, 2024 9:58 am Financial Restructuring

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Schemes and Restructuring Plans in Deep Dive; What New Precedents Developed? What Is Next?

Reorg has compiled the facts, notable features and court documents for all schemes of arrangement (Schemes) and Part 26A Restructuring Plans (Plans) that were before the English courts in 2023.

Schemes 2023

Key Take Homes

  • Borrowers creatively use Schemes to get around Russia-related sanctions restrictions: Nearly two years after the start of the war, Russia-related sanctions still impact the ability of restructuring debtors to deal with their sanctioned creditors. However, the Scheme process remains flexible and utilitarian enough to be used by debtors to distribute proceeds to creditors who may be subject to Russia-related sanctions.
    • Petropavlovsk used a Scheme to make distributions following an administration, avoiding sanctions.
    • Nostrumin 2022 was also able to use a Scheme (coupled with a trust mechanism) to deal with creditors subject to Russia sanctions.
    • Implementation of Praesidiad’s Scheme of 2023 was subject to the receipt of sanctions license, but the English courts were satisfied they could approve it as the sanctioned lender could not be adversely affected in a manner different from any other lender in the same class.
  • Optionality or “Alternate Schemes” for creditors is acceptable to the English courts. Non-Standard Finance, or NSF, provided a Plan A Scheme and a fallback Plan B Scheme if a recapitalization could not be achieved. Plan B, involving the debt-for-equity swap and haircut to compensation claims was pursued.
  • Schemes enhance recoveries compared with other restructuring processes. Haya’s 2023 Scheme claimed to repay creditors 40% more than an insolvency would. Lecta’s 2023 Scheme purported 100% recovery versus an expected 44% to 71% in an alternative process.

Unlock comprehensive insights by downloading the EMEA Schemes/26A Wrap 2023 now and delve into the complete report.

For more reports and guides by Reorg, please click here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

To keep up on the latest coverage with Reorg, follow Reorg on LinkedIn and X.

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EMEA Restructuring Wrap 2023
Wed Jan 10, 2024 12:27 pm Distressed Debt  Financial Restructuring

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Reorg Data Shows 2023 Featured a Marked Change in Restructuring Trends Since 2022

Introduction

There has been a measurable uptick in restructuring activity in Western Europe over the last 11 months of 2023 compared with 2022, according to data collected by Reorg in the EMEA Restructuring Database (RXD), available on Credit Cloud.

Key Takeaways

  • More Restructuring Deals in 2023 – During 2022, 29 debtors completed financial restructurings, compared with 47 that have completed so far in 2023 marking a large increase – there are currently still 34 ongoing restructurings in Western Europe as of Dec. 4, 2023.
  • Half of Deals Conclude Consensually – 47% of “in restructuring” debtors in 2023 are pursuing out of court, consensual type restructurings, a figure which is similar to, the 53% implemented consensually during 2022; and the 52% implemented and closed consensually during 2023 so far.
  • English Restructuring Tech Most Popular – During 2022 and 2023, just over half of deals in Western Europe the last 23 months used either a Scheme of Arrangement, Part 26A Restructuring Plan or a Company Voluntary Arrangement.
  • More Debt for Equity Type Deals by Number in 2023: In 2022, just 27% of deals included a debt for equity exchange, compared with 34% of deals closed so far 2023.
  • More New Money Deals Feature in Equitization in 2023: In 2023, where a debt-for-equity swap was implemented, 69% of deals also featured new money, whereas in 2022 only 14% of deals which included a debt for equity swap also featured new money.
  • 2023 Sees Less in Court Equitisations: In 2023, 45% of debt for equity deals were concluded in court, compared with 62.5% of the same type of deal in 2022 which required court involvement.
  • Amend & Extend Financial Restructuring Deals on the Increase: Just 17% of deals in 2022 featured an amend-and-extend transaction, compared with 40% in 2023.

Download the EMEA Restructuring Wrap 2023 now to stay informed and gain strategic insights into the evolving restructuring landscape.

For more reports and guides by Reorg, please click here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

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Reorg London Credit Seminar

Exploring current themes and what lies ahead for the primary and distressed markets.
In-person only event at the Biltmore, Mayfair.

November 2, 2023
3:30 PM-8:00 PM

You’re Invited! If you haven’t registered yet, we cordially invite you to join us.

Agenda at a Glance

  • Registration: 3:30 – 4:00 p.m.
  • Welcome by Global Head of Editorial, Mario Oliviero: 4:00 – 4:05 p.m.
  • Performing Credit Panel: Debut Issuers Return as Sponsors and Investors Embrace New Normal, moderated by Bart Capeci, including audience Q&A: 4:05 – 4:55 p.m.
  • Spotlight on ESG by Luke Wood: 4:55 – 5:05 p.m.
  • Distressed Panel: Lenders Take Charge as Sponsors Run Out of Options in High Interest Rate Market, moderated by Magnus Scherman, including audience Q&A: 5:05 – 5:55 p.m.
  • Cocktails, Canapes and Networking: 5:55 – 7:45 p.m.

Bart Capeci will moderate the performing panel ‘Debut Issuers Return as Sponsors and Investors Embrace New Normal’ featuring guests Camille Mcleod-Salmon from Fidelity International, Jamie Cane, CFA from Muzinich & Co, Natalie Day Netter from J.P. Morgan and Pieter Staelens from CVC Capital Partners.

London credit seminar Reorg November 2 
https://ow.ly/vsNK50PYufP

Magnus Scherman will moderate the second panel ‘Lenders Take Charge as Sponsors Run Out of Options in High Interest Rate Market’ which will be moderated by Magnus Scherman. This panel includes experts Christian Herrmann from Polus Capital Management, Gani Diwan from Triton Partners, Sam Whittaker from Lazard and Toby Smyth from Simpson Thacher & Bartlett LLP.

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In-person only attendance for credit professionals in London.
Register today for great content and networking over cocktails and canapes.

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Asia Credit Daily

Chinese regulators take further steps to cut down payments for home buyers and encourage banks to lower interest rates on existing mortgages, according to joint statements issued by the People’s Bank of China and National Administration of Financial Regulation on Thursday, Aug. 31. The minimum down payment will be uniformly reduced to no less than 20% for first home purchases and no less than 30% for second home purchases. The lower limit of mortgage interest rate for second home purchase had been adjusted to the level of related LPR+20 bps while the lower limit of mortgage interest rate for first home purchases remained at the level of related LPR-20 bps.

India’s GDP surged by 7.8% in April-June, surpassing predictions of 7.7% and up from 6.1% in the previous quarter and marked the highest in four quarters, driven by strong services sector and government capital spending. However experts suggest faster expansion in the first half of the financial year might give way to slower growth in the latter half, Nikkei Asia reported.

Shanghai Composite Index went up 0.34% to 3,130 as of 2:04 p.m. Beijing Time. Japan’s Nikkei 225 Index went up 0.28% to close at 32,711, while Australia’s S&P/ASX200 went down 0.36% to close at 7,279. Hong Kong market is closed today due to No. 9 Typhoon.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

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H1 2023 Restructuring Wrap

During the first half of 2023, Reorg saw 23 debtors close restructurings, considerably more than the 14 that closed deals in H2’22 and 15 in H1’22.

Restructuring activity has increased in 2023, but still falls short of 2020 levels, which saw 61 restructurings close across the year.

Only 35% of restructurings closed consensually, out of court, in H1’23. This compares with 43% and 60% in H1’22 and H2’22 respectively. There appears to be a trend of debtors being more likely to pursue in-court restructurings, with a correlating increase in challenge – 22% of deals attracted a challenge in H1’23, compared to 17% during the whole of 2022.

There are 39 restructurings currently live, 14 of which are in a court process, notably seven are in U.K. court processes (CVAs, Scheme or Part 26A Plans). As of January, this number was 45, suggesting that deals are closing.

Included in the definition of restructuring are both consensual and non-consensual transactions, which featured at least one of the following: (i) an exchange of existing debt for new debt with different terms; (ii) the provision of new money through a new instrument; (iii) the equitization of existing debt instruments; and (iv) the amendment and extension of the maturity date of existing debt instruments.

Read the full article here.

If you would like to be panelist on any upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

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