Anthony Kay

Partner

London


Read full biography at www.orrick.com
Anthony has a wealth of experience in complex cross-border finance matters and is well regarded in the market.He acts for sponsors and their portfolio companies, credit funds, banks, direct and alternative lenders and other financial institutions on financing matters generally but with a particular focus on acquisition, leveraged and private equity finance and direct lending.

Posts by: Anthony Kay

COVID-19-Related Defaults in European Leveraged Loans Could Create Opportunities for Distressed Investors

 

Since the last financial crisis, borrowers and private equity sponsors have cut distressed investors out of most European leveraged loan deals. According to Reorg Debt Explained about 66% of European leveraged loans in 2019 restricted transfers to distressed investors.[1] But the recent economic turmoil created by the COVID-19 pandemic could create opportunities for distressed investors to return to the market. Fitch Ratings recently forecast a 4% default rate for European leveraged loans in 2020 and a 7% default rate in 2020.[2] In a severe downside scenario, Fitch projected that default rates could reach as high as 14% next year. In some European leveraged loan deals, the transfer restrictions that have kept distressed investors out of lending syndicates may fall away if events of default (or certain specific events of default) occur and continue. Read our key takeaways here.