Daily News: March 11, 2015

AlixPartners: Energy, Retail May Face Distress in 2015

An AlixPartners survey points to an increase in Chapter 11 business filings. Experts say energy resources and retail are U.S. industries most likely to face distress in 2015.

Highlights of the survey include:

  • 47% of restructuring experts surveyed believe that Chapter 11 filings will increase in 2015
  • 53% of experts surveyed predict that pre-negotiated and pre-packaged bankruptcies will increase
  • There is nearly unanimous agreement (99%) among respondents that the presence of non-traditional lenders and investors will continue to grow in the term loan market
  • Seventy-four percent of the experts surveyed view collateralized loan obligation (CLO) ownership as having a negative impact on restructurings
  • Restructuring experts surveyed foresee the energy and resources sectors as the leading candidates for restructurings, in the U.S. (79%) and globally (78%), followed by the retail industry

Lisa Donahue, managing director and global leader of AlixPartners’ Turnaround and Restructuring practice, said, “As our survey indicates, restructuring experts, including lawyers, bankers, hedge fund and private equity professionals, see a likely increase in the number of business Chapter 11 filings in 2015. In terms of specific sectors, our results show that the energy sector is viewed as the industry most likely to face distress in 2015, with companies facing significant pressure following the steep drop in commodity prices that began last June.”