As struggling companies focus on pushing out their debt maturity walls, debt restructuring deals are being delayed.
The reduction in the size of the maturity walls can certainly be an advantage for companies in restructuring talks, but if interest rates stay elevated, many borrowers may face a sooner-than-expected day of reckoning because they don’t have the cash to service their debts.
That’s one of the reasons credit-focused funds are raising money now. They see a continuing opportunity to provide funding to strapped-for-cash companies while taking advantage of loose legal covenants in credit agreements.
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