Registration & networking breakfast
Chair's opening remarks
Presentation: Debtwire – the next generation of information for leveraged capital markets professionals
Keynote presentation: European distressed outlook 2023
In this keynote presentation, Deloitte and Linklaters will review the findings of their new report, published in with Debtwire, reviewing the outlook for the European distressed and restructuring market in 2023.
Keynote panel: 2023 European distressed & restructuring outlook
Record high levels of inflation have forced central banks across the world to take drastic action with regards to interest rates. Subsequently, the era of cheap credit in Europe has come to an end as the continent braces itself for the inevitable looming wave of corporate restructurings. In this panel, speakers will reflect on some of the key takeaways from bankruptcy cases and legislative reforms across Europe over the past year and discuss the outlook for restructurings in 2023.
- What is driving distress in Europe? Which sectors and geographies are driving distress?
- What alternative financing solutions are leveraged capital markets professionals considering in the face of increased interest rates and a lack of cheap credit?
- Which legislative reforms will be most impactful in 2023 on distressed companies?
- What is the pipeline for distressed investors in Europe and emerging markets?
Coffee & networking break
Panel: Sector focus - Energy
The energy retail market is in flux with Europe’s high dependency on Russian gas and soaring energy costs leading to an impact on consumers’ finances. The net zero agenda is also pushing the issue to crisis levels. In 2022, Ofgem made proposals which included three suggestions concerning financial resilience of energy companies including ring-fencing customer credit balances, hedging and capital adequacy proposals. However, the market will be impacted by the rulings of the insolvency proceedings of energy companies to apply to the High Court in 2021 to review judgement on the obligations of suppliers. This panel will discuss:
- Will the rulings of 2021 insolvent energy companies impact legislation for energy companies in distress now?
- What rescue opportunities are available to struggling energy companies?
- What are the implications on debt holders of the Energy Transfer Scheme as seen in Octopus Energy’s take-over of Bulb in 2022?
Panel: European insolvency & bankruptcy legislation updates 2023
During the Covid-19 pandemic, many European countries reviewed and revamped their insolvency laws introducing both new temporary and permanent measures to aid companies in financial distress during this period. Many countries have retained temporary measures to support businesses whilst others are reforming insolvency regimes and adapting relief measures as businesses face the ‘return to normal’. This legal focused panel will discuss:
- Which countries are making notable reforms to insolvency regimes in the ‘return to normal’ post pandemic? Focusing on the UK, France, and Germany.
- How will these reforms affect large and small-scale insolvencies? Is the wave of European restructurings coming?
- How are the regime reforms swinging the balance of favour towards or against debtors and creditors?
Presentation: Spanish restructuring outlook
This presentation will review new insolvency laws in Spain and the outlook for restructurings in the country.
Panel: Geographic focus – Spanish restructurings
Leveraged loan issuance in Spain started off well at the start of 2022 but dropped significantly as Spanish activity moved in sync with the wider downturn across Europe due to multiple headwinds. The decline in the Spanish high yield space has been even more pronounced, with issuance down 80% year-on-year in the first half. The outlook remains challenging with high inflation and rising household prices. Experts expect to see a higher volume of restructurings following the close of an insolvency moratorium introduced by the Spanish government post-pandemic. The closure means that debtors and blocked creditors can now file for insolvency petitions against borrowers. This panel will discuss:
- Will M&A activity keep debt issuance active in 2023?
- Have restructuring situations peaked since the reforms to the country’s insolvency regime? What further legislation should we expect in 2023?
- Which sectors will prove most fruitful for debt issuance or restructuring opportunities for distressed investors? Which companies are LCM professionals keeping an eye on?
Panel: The state of European ABS
After a decade of benign performance in European ABS, soaring inflation is squeezing household budgets and rising rates are pushing mortgage costs up and property valuations down. Liquidity in ABS and RMBS transactions stood up well to the liability-driven investment strategies in 2022, often performing better than corporate bonds. Experts expect tranche spreads and pricing on underlying loans to eventually level out with central banks encouraging more issuance in 2023. This panel will discuss:
- Which asset classes and jurisdictions are most exposed to the downturn?
- What opportunities are there for investors with the ability to take advantage of illiquidity?
- Which regulatory developments from the European Commission in its review of EUSR will be the most impactful?
Panel: CEEMA focus – the impact of sanctions on Russian debt holders & the Ukrainian outlook
The sanctions imposed on Russia have affected roughly $20bn of Russian sovereign bonds held by foreigners. The sanctions imposed on Russia have led to a collapse in the value of their holdings. Most western banks have been forced to pull back from trading Russian securities, but some US financial institutions keen to clear and settle their investments have returned to the market for divestment purposes. Russia has demonstrated a willingness to make debt repayments, but will alternative payment mechanisms prove maintainable? This panel will discuss:
- What are the options to defer payments or alternative payment mechanisms for foreign Russian bond holders?
- What is the outlook for Ukrainian sovereign bond holders?
- Is it sustainable to defer bond repayments for Russian or Ukrainian companies who are still operating and managing to service their debt?
Case studies: EMEA high yield to distress
Panellists will discuss opportunities for investors in European high-yield companies that have become distressed since the second half of 2022 and which are actively restructuring their debt. The panel will examine in which sectors issuers have faced increased risks of default, the role of high yield covenant packages in shaping outcomes of restructuring processes, and what fundamental factors can make attractive high yield distressed debt investments.
Two case studies will represent different geographies and sectors to demonstrate the valuable opportunities for distressed investors. Case studies will be:
- German real estate – the restructuring of Adler Group and the impact of monetizable assets in shaping bondholder outcomes.
- Consumer sector – investing in distressed retailers such as Matalan, Lycra and Takko and the impact of bondholder groups in influencing decision-making.
Chair's closing remarks & networking drinks
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