Let me start with a topic near and dear to all of us…the Debt Wall is lower than everyone though it would be last year. What does that mean for us? Is the economy “strong” yet? If the economy gets too “strong” for too long, what will we do for a living? Will we have to retool? In the next few weeks, I am going to answer these questions and more.
Everyone wants more work right now. There is a lot of hand wringing over where it’s going to come from and when. The answers, however, are all right in front of us.
Every time I overhear a debate about whether the economy presently is “strong” or “weak”, I want to interrupt and say, “Its neither.” As restructuring types, if there is one thing we know, its that the economy is never “good” or “bad” – its simply evolving. Like the weather in New York – it changes every ten minutes. The economy may seem “bad” to most people now, but its “good” right now for one group of people that we serve – investors in the distressed debt and restructuring market. This is also a good time for investors in the established sectors.
Everything is “mis-priced” now. This means that both types of investors – both distressed/restructuring and traditional – have tremendous opportunities. Investors realize the largest gains when they buy in a weak economy, whether buying debt, assets or equity.
Distressed debt strategies rely the bankruptcy process, Chapter 11 is a critical part of maximizing their returns. Whether the debt is bought and sold before or during a chapter 11 case, and whether or not the strategy requires the active involvement of the investor in the case, the bankruptcy process is a key ingredient. What this means for us, of course, is representation opportunities on the horizon.
Identifying opportunities is important to each and every one of us, and to many if not most of our clients (existing or potential), too. One focus of this blog will be information sharing, including tips and leads to help all of us chase after those opportunities. There is nothing like a blog for getting information that can otherwise be elusive, and getting it fast.
Is “Amend, Extend and Pretend” over yet? Billions of debt with 2011 maturity dates has been extended to 2014 or beyond. The high level of high-yield bond issues last year: what does this mean for us? What happens when LIBOR goes up? What are the “new defaults?”? To be discussed in this five part series – continuing next week.
Have a question you would like to see answered/discussed? This is the place. Please send me a message at email@example.com.