Insight

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

March 2017
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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?

 

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