Debt Advisory & Restructuring – 2020/2021 Perspectives
No matter how we try to characterize 2020, it always feels like an understatement. As 2021 kicks off, many of the same challenges remain, and, undoubtedly, we will encounter new obstacles. Nonetheless, there is optimism in putting COVID-19 largely behind us and beginning to chart a path toward the “new normal”, which, in many respects, has yet to be determined.
To help make sense of the current environment and what we can expect, we invite you to read our latest insights from our Debt Advisory & Restructuring team leaders Derek Pitts, Mark Hootnick and Tero Jänne.
Here are some of our high-level thoughts:
- Interest rates are at historically low levels and will remain so for the foreseeable future
- Equity markets continue to set records that sometimes seem to contrast with how we think about the economy during this COVID era
- Debt capital markets are very robust, and per some metrics, record-breaking on both the public and private financing side
- M&A markets continue to be very active at meaningful valuations
- Debt advisory, special situations, and restructuring transactions, some of which were driven by the impact of COVID-19, continue to find lender/investor support across all industries for M&A, bridge financings, and in many cases, full recapitalizations of the balance sheet
What do we see ahead?
- The early-vintage COVID-19 bridge financings and recap transactions will need to be revisited and re-assessed perhaps with a broader range of strategic alternatives
- COVID “lag-effect” industry sectors (e.g., aviation, hospitality, REIT’s, media, site-based entertainment) will need to chart their course and perhaps use 2021 as a “set the table” year to springboard in a post-COVID environment
- Given the strength of the capital markets and investor interest in post-COVID turnaround success stories, we expect to see and access continued innovation and creativity in the special situations space
For additional insights, click below to view our latest Macro and Markets Quarterly Update for January 2021, which includes macroeconomic, financial and M&A markets background.