By CEO Marc S. Cooper
As 2026 unfolds, questions around US bankruptcies, capital structure stress, and the durability of recent credit strategies remain top of mind for investors and corporate leaders alike. This month I sat down with the firm’s Head of Capital Advisory Vinod Chandiramani to discuss what may lie ahead for financing, capital solutions, liability management, restructurings, the broader economy, and expansion of his team.
Vinod, there’s been a lot of discussion about whether US bankruptcies could rise again this year. From your perspective, what are you watching most closely in 2026?
It’s difficult to say whether bankruptcies, measured purely by case counts, will increase in 2026. We do believe there will be an uptick in comprehensive balance sheet restructuring activity, particularly among issuers with less than $1 billion of obligations. This is likely to be driven by lender-led, out-of-court, change of control transactions, alongside some traditional bankruptcies.
While we do not have a view on whether there will be an uptick in the number of traditional in-court restructuring, we do believe that the size (as measured in liabilities) of the median in-court restructuring will increase this year.
Several factors are contributing to this dynamic, including the sustained level of higher base rates, shallow M&A market for non-best-in-class assets, increasingly conservative views of terminal value among credit investors, and rising investment requirements—particularly in areas such as technology—that issuers must make to maintain relevance and competitive positioning, and more recently potential hard asset inflationary pressures.
If restructuring activity does pick up, should that be viewed as a risk to what many still see as a relatively optimistic outlook for the US economy?
Prior to the conflict in the Middle East, and based on the dialogues we’re having with our clients across our industry coverage areas, we did not believe an increase in balance sheet restructuring activity would disproportionately impact the broader economic outlook. Today, that question is tougher to answer. Within Solomon’s coverage universe, it does not appear to be a material factor. However, within certain industries we tangentially monitor in our group, we can see challenges arising.
In many cases, balance sheet restructuring can serve as a constructive tool. It can facilitate companies regaining access to capital, investing in their underlying businesses, and ultimately increasing their contribution to economic growth.
From that perspective, restructuring is not necessarily a negative signal, but rather a mechanism for adaptation and renewal. The balance that needs to be managed is the cost to implement relative to the economic prospects of the underlying issuer.
Over the past few years, many lenders and borrowers relied on “extend and pretend” strategies to manage stressed capital structures. Can that approach still work in 2026?
We believe the bar for nontraditional extension transactions will rise this year. When it comes to amend and extend transactions, credit investors are taking a more conservative view of terminal value and are increasingly focused on making sure the company has sufficient capital to preserve and grow that value.
We believe that will essentially result in a dynamic where investors will be focused on making sure that companies have sufficient capital to invest and create value. We think the focus will not only be about “buying time,” but it will also be about gaining comfort with the pathway to increase value.
A limitation to the “extend and pretend” approach tends to emerge when terminal value concerns remain unresolved at the end of the extension period. Those concerns may be driven by a number of factors, including structural shifts within an industry that require meaningful investment during the extension window, business plans that lack sufficient validation at the time an extension is negotiated, and limited access to junior capital—whether from existing stakeholders or new investors. In these situations, amend and extend strategies become more difficult to justify, and credit investors will require more comprehensive capital structure solutions.
From my perspective, the 2026 outlook suggests a continued evolution in US credit markets, with more comprehensive recapitalization playing an increasingly central role for leveraged companies. While overall bankruptcy filings may remain uneven, higher interest rates, rising investment requirements, inflationary pressures and more conservative terminal value assumptions will drive more rigorous capital structure solutions. At the same time, amend and extend transactions are facing greater scrutiny, as credit investors demand clearer paths to value creation and stronger business plan validation.
In this environment, proactive capital advisory, disciplined underwriting, and realistic long-term planning will be critical for borrowers and lenders navigating the next phase of the cycle.
Vinod, you came onboard a year-and-a-half ago. How has the Capital Advisory group evolved since then?
When I joined, Capital Advisory was essentially a blank whiteboard. Over the past 18 months, we’ve focused on building the right team thoughtfully and deliberately. We’ve added significant talent, and in March welcomed Michael Sellinger as a Partner and Jordan Stevens as a Managing Director which followed the hiring of Jonathan Brownstein last September.
I’m proud of the team we’ve built—everyone shares a collaborative, long-term mindset. Joe Stein has been a cornerstone of the firm for over 25 years, and with Joe as an anchor, we’ve been able to add people who value our culture and approach the work the same way.
We’ve hired for mindset. We are a solutions-oriented advisory team—one that asks, “What is right solution for the situation, how can that solution be delivered and can we add value for our clients and industry partners in connection with delivering the solution?” And, if for some reason we are not the appropriate team on the field to deliver that result, being the trusted banker that communicates that finding to our clients and partners.
The result is a Capital Advisory group that’s strong not only in experience but in how we approach problems, partner with our sector teams, and serve clients. It’s been exciting to see it come together.
Read more about the expansion of the Capital Advisory team.