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Coming to a Cash-Strapped Company Near You: Creditor-on-Creditor Violence - WSJ

Aug 19, 2024, 8:41 AM EDT1 sourcesAI-analyzed

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Companies are negotiating with creditors to manage distressed debts more aggressively. Liability management exercises (LMEs) are becoming common among low-rated corporate borrowers. Private equity firms may struggle due to rising interest rates and increased defaults. Distressed bonds now total roughly $155 billion, influencing market dynamics. LMEs could negatively impact recoveries for debt investors in the longer term.

  • Companies are negotiating with creditors to manage distressed debts more aggressively.
  • Liability management exercises (LMEs) are becoming common among low-rated corporate borrowers.
  • Private equity firms may struggle due to rising interest rates and increased defaults.
  • Distressed bonds now total roughly $155 billion, influencing market dynamics.
  • LMEs could negatively impact recoveries for debt investors in the longer term.

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