Global Credit Highlights — (Friday, May 20 2022)
Tue May 24, 2022 12:21 pm Distressed Debt

Distressed Activity Gains Momentum in US, Debt Talks Develop in Europe as Primary Markets Hiccup; Underwriters Offer Credit Enhancement for Chinese Developers’ New Bond Issues, India’s Stalling IPO Market Generates Direct Lending Opportunities

Reorg’s editorial leadership has selected the following list of the most compelling and topical situations and distressed activity across our global coverage universe. For any suggestions please email us at

In the Americas, distressed activity is gaining momentum, with an increasing number of companies looking to reset their capital structures amid rising inflation, near-record fuel and commodity prices and ongoing supply chain constraints resulting from the war in Ukraine and China’s Covid-19 lockdowns.

The proliferation of cov-lite deals over the last decade, during which time record volumes of leveraged loans and high-yield bonds were brought to market, combined with an expected increase in default rate, has brought an increased focus on the potential for priming transactions in distressed credits. Market participants are closely monitoring credits such as Envision Healthcare and Incora for clues on whether legal challenges brought by lenders left out of priming recapitalizations can succeed.

In Europe, where the leveraged loan and the high yield bond markets are still struggling to kick start in earnest, some restructuring talks have picked up pace too. While OptiGroup and Europcar both pulled new transactions citing market conditions, European direct lenders have been taking advantage of closure of other markets to pick up deals including Morrisons debt at a discount from the underwriters books. Elsewhere, companies and investors started to appoint advisors for debt talk on situations including Hilding Anders, Holland & Barrett as well as Adler Group.

India’s slowing IPO market is creating direct lending opportunities, as companies with stalled listings face a need for growth capital. In China, some real estate companies face a more favorable policy environment as underwriters are providing credit enhancement measures for new bond issues by developers under the directives from regulators to support healthier issuers’ return to the capital market.

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