Total debt is on the rise, with corporates taking advantage of historically low funding costs to fuel growth, however, the impact of the pandemic has triggered restructurings and corporate defaults, with businesses clinging on to critical government support schemes.
Many sectors are under stress with banks especially struggling to remove bad debts and shore up balance sheets and southern European countries sitting on huge piles of bad debt.
For bold credit investors, and specialised funds, the rise of NPLs presents an opportunity not seen since the 08/09 financial crisis.
Yet the circumstances, drivers and market conditions are different this time round, the crisis event driven and not triggered by cyclical/ structural influences, presenting a paradigm shift that investors and sellers will have to understand.
Sellers will have to consider their workflows and processes and outreach to investors, whilst investors will have to consider a new set of parameters to conduct due diligence and assess transactions.
Financial Times Live, in partnership with Datasite, will bring together industry leaders to help practitioners navigate and unpack this new NPL landscape.