Home > economy, united states, world > U.S. restructuring wave to come over 18 months: GE

U.S. restructuring wave to come over 18 months: GE

An “avalanche” of large U.S. businesses will need to be restructured over the next 12 to18 months, said Rob McMahon, head of General Electric Corp’s (GE.N: QuoteProfile,ResearchStock Buzz) Restructuring Finance Group.

McMahon told the Reuters Restructuring Summit in New York on Thursday that the recent slowdown in bankruptcies and restructurings was partly due to the easy terms of loans extended prior to the credit crisis.

“The only thing keeping more companies from filing right now is all the convenant-lite deals,” said McMahon, whose unit is one of the leading providers of debtor-in-possession or DIP loans to bankrupt companies, “We’re still heading for an avalanche of deals over the next 12 to 18 months that will keep the restructuring world quite busy.”

Some restructuring professionals have blamed the lack of DIP loans for out-of-court restructurings, liquidations and quick sales in bankruptcy court. McMahon said that explanation misses the larger issue of companies that have used all their assets to secure existing debt, leaving nothing to provide as security for a DIP loan.

original post @ Reuters

Advertisements
Categories: economy, united states, world Tags: ,
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: