Storm clouds on the horizon: an analysis of the UK retail sector and its financing

2016 was marked by major political upheaval—most notably the Brexit vote, US presidential election, and macroeconomic uncertainty. Regardless, the debt markets seem to have taken little notice.^*

At a glance

• A competitive lending environment has ushered in increasingly borrower-friendly terms.
• The main driver has been the major supply and demand imbalance in European debt markets.
• But the debt market’s buoyancy may not extend to all sectors—in fact, the retail sector remains under pressure.
• Default levels are likely to rise—though we don’t yet know when and by how much.
• Having access to multiple alternative sources of financing and addressing refinancing requirements early will be key going forward.

 *Based on AlixPartners' foreword titled Buoyant debt market conditions, but will retailers be able to cash in?