is the restructuring market coming back?
curious since there's been a flight to quality in hy market, equity markets are going sideways and the other stuff (gdp, unemployment, downgrades, etc.).
there's a a little over a trillion dollars on corporate balance sheets and interest rates are still low.. the big banks are still lending and are bigger than they were in 2008..
div recaps and other opportunistic financings are ehh.. lbos and other types of financing are still clearing the market..
what r u guys seeing right now? is restructuring making a comeback?
I think that about $1.5 trillion of leveraged debt will be maturing within the next 3-4 years. It will have to be refinanced etc. Should see activity in that market. Even if the traditional/large lenders are limited in their capacity to offer financing due to new regulations and so on, I think there are plenty of middle-market focused shops that can pick up the slack.
hmm...true.. assuming 30% or so of that $1.4 trillion in debt is able to get repaid through amort and cash from the balance sheet (i think there's about $1.2 trillion of cash on companies balance sheet in the S&P 500).. yeah seems like the financing market might be robust as long as interest rates are kept low..
anyone else?
bump
Restructuring deal flow in the future (Originally Posted: 02/23/2013)
Monkeys,
What are your thoughts on what RX deal flow is going to look like in a year or two? Given the fact that RX deal flow typically picks up in an economic downturn and wanes when the economy starts heating up again, is joining a RX group still a good idea in the coming years (in terms of job security and exit opps)?
This is all assuming that you're entering banking at a firm with a strong restructuring practice (BX, Lazard, Rothschild, Miller Buckfire, Evercore, Moelis, etc.), of course.
What are everyone's thoughts on the matter?
bump
Not a lot of deal flow right now, actually. A few deals going on, but not the flow that many might think. While the economy has been pretty poor the last few years, the debt markets have been wide-open. You could refi a melting ice cube with 7 year cov-lite paper right now and you would probably upsize the deal.
Based on what I have seen, 2018-2020 will be banner years for RX.
This is all for the US -- Europe is now starting to heat up.
bang on. but the situation is pretty much the same for EUR.
we have a few old deal coming back (e.g. Seat PG), but few large banner deals coming out, again because of the crazy capital markets at the moment. there is some activity on infra style deals (Saur, M6 toll) and some interesting real estate ones. when the CLO bid falls away, could be carnage.
BX TXU deal is a banner deal this year
uh wait what? pretty sure BX is just advising the equity in that deal...and that evercore is advising the debtors? that's just what i heard, i could be wrong.
The analyst level is more relevant for me, haha.
I think M&A is a more generally transferable skill set. You will hone all of your general corporate finance skills. Inasmuch, you will have a wider berth of exit opps. You won't, however, have exit opps into a distress fund. I think that distress/restructuring skills are some of the most specific skills in the IB world. People who start a career in distress very often stay in distress for their entire career. If you love distress, that restructuring is the place to go. If you aren't sure, I would go for M&A.
Thanks for your thoughts, man. Definitely will have to try out RX as a SA before making the plunge, then. SB'd.
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