FACTBOX: Distressed investing outlook for 2009

NEW YORK (Reuters) - Corporate bankruptcies and restructurings are expected to soar this year as dwindling revenues and tight lending markets force companies ranging from retailers to casinos and home builders to make tough changes or shut their doors.

Following are comments from some of the top U.S. restructuring experts on the outlook for distressed investing in 2009, including the potential for mergers and acquisitions and predictions on the availability of debtor-in-possession financing.

JAMES SPRAYREGEN, PARTNER AND BANKRUPTCY ATTORNEY, KIRKLAND

& ELLIS, CHICAGO

"Where DIP financing is not available, and where liquidity is an issue, that will force some accelerated M&A processes. I think we're going to see a significant increase in activity in that area in 2009."

BRYAN MARSAL, C0-CHIEF EXECUTIVE OFFICER, ALVAREZ & MARSAL,

NEW YORK

"DIP will start to ease up, but smart people will start to offer DIP financing at very expensive prices and with lots of conditions that didn't exist in the past."

FRED CRAWFORD, CHIEF EXECUTIVE OFFICER, ALIXPARTNERS, NEW

YORK:

"We may see an increase in M&A activity just because there are fewer good (alternative) options available. You may see companies merging together with the idea that 'If we can get very efficient with the cost structure with a combined company, we can see our way through these tough times.'"

"I anticipate that the role of private equity will shift, at least in intermediate term, from financial engineering to operational engineering. There will be more of a buckling down to improve the operations of a portfolio company."

"I think the first quarter and probably the first half of 2009 will continue to see a very difficult market for DIP financing. Many of the traditional lenders are either sitting on cash or trying to build a larger cash position or making the terms available pretty onerous. We unfortunately expect that the first half of '09 will continue like the second half of '08, where it's tough to get financing."

MARK SHAPIRO, HEAD OF RESTRUCTURING AND FINANCE GROUP ,

BARCLAYS CAPITAL, NEW YORK

"Financing markets right now are really driving the lack of appetite for assets at the moment. Maybe if liquidity starts to loosen up a little bit and if people have greater visibility into what 2009 will look like, then people may be more confident in buying assets. But right now people are looking at things from a very distressed standpoint -- so they're willing to buy things but only at a really distressed price."