Bankruptcy and restructuring 2020 outlook
March 04, 2020
Restructuring activity in 2019 reflected a resilient economic environment that cultivated the longest US expansion in history. Activity was seen largely in a few active sectors, including energy and energy services, communications, pharma and life sciences, and retail.
As well, restructuring activity in 2019 was more notable for the size of companies that filed rather than the volume of activity. The number of filings increased by only 2.4%, while the aggregate liabilities addressed in those filings increased by 55.9% according to The Deal, Debtwire.
Outlook for 2020
An uptick in Chapter 11 filings over 2019 may be a sign of what’s to come in 2020 and 2021 but despite the strong economy in 2019, our outlook for 2020 is at best uncertain. A potential economic slowdown from COVID-19 and the residual impact of trade disputes/tariffs with China, lingering trade tensions and growing unrest in the Middle East, among other factors could all threaten to hinder growth.
In our Bankruptcy and restructuring year in review and 2020 outlook, we take a deeper dive into:
- The largest restructurings of 2019 and standout sectors where activity was concentrated
- The five sectors that could see the most restructuring activity in 2020
- How the magnitude of capital available to opportunistic investors could reshape the next downturn
- What the increase in lower-rated investment-grade debt could mean for lower-tier high-yield bond borrowers
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