Managing Director, New York
For the last several decades, it was relatively easy to predict when companies would run into financial distress. Credit would tighten, rates would go up, and when struggling companies needed to refinance their debt, they would not have enough cashflow to make their interest payments. This would necessitate a corporate restructuring. And in fact, this is still the case today, though we have not seen this cycle in more than a decade as interest rates have stayed low and cash plentiful.
Yet, while this accommodating credit cycle has been in place for a long period, we see many companies having a hard time in sector after sector. The macro headlines look reasonably good, but beneath the surface we see some companies doing extremely well, and many other companies struggling, closing plants and stores, shedding jobs, selling business units and straining to fund innovation and growth.