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Restructurings to Keep Current Pace

Thursday, October 07, 2010 - 05:02

Head of the Restructuring Finance Group at GE Capital says while defaults have gone down, restructurings will continue at same pace in 2011.

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man managing director of GE capital just. Spoken to Reuters restructuring summit here in new York and he joins us now I -- rub -- senior managing director of the restructuring fine if there. Well -- thanks to -- to rob dean faltered on bankruptcy filings in them so where are you focusing. -- capital. Yeah we we continue to focus on not only that -- possessing space opera for the moment of filing but also the exit. I'm so we're spent our time with borrowers are still looking to restructure but -- looking to restructure on a more expedited basis. So they'll move from my dipped to appeal are in terms of prepackaged arranged stock deal. Got things are changing in debt financing Arthur because it just wasn't as high as it was to say last year. Yet last year was certainly. Debtor in possession financing for the year. All in I think without the GM Chrysler loans and came in about eighteen billion dollars. When adding to the forty billion for those two institutions -- You know it's sixty now so. We are pacing right now about closer to three billion for this year. And last year it was just do a series and obviously it's odd to us things that happened in the market. And a lot of what happened last you Louis was large cap space. Which differentiates itself from this year where that critical companies have been -- are much smaller. In fact the I exit number one deal that is actually space that you -- in the top ten asked him to think they're getting smaller. Three billion -- DC going even lower next. I'd say we're probably. Will be a little bit higher than three billion I think it last year. Was exceptional because of the size of the deals do like liquidity for sound. This year was exceptional because many of those accelerated disease last year and we saw probably. Certain level of relief given for high yield. Which took pressure off a lot of companies from having the or those who had an extended their existing facilities into future years so I suspect we'll get back to more historical norms. Which would puts probably close to 35 billion dollars told line. And filings which were on pace last year for about 235. Filings. Significance those with liabilities 100 million pounds a hundred and a hundred billion more we'll likely -- half that. This year and probably about the same next year college entry to entry is the situation any different for exit fines. This this situation with exit financing round is always a function of the size of the companies that filed. And that volume has lived and -- more steady state. We're on pace for about sixteen billion. By this year. There was about. Fourteen to sixteen billion last year. Again on including GM and Chrysler. And would probably likely to see that number tail off it because of the the drop in -- in the drop this year. And given the I can he's become a bit quieter. On what you perceive the twenty alive. Well we still think that a number of firms who have pushed off the inevitable will still need restructuring and and so while default rates have come down there are number of institution number borrowers to. And and an expanded war. Who dated debt for equity exchange that will actually need to. Anyway so we do. The -- season those companies and and still be worked. And how is -- positioning itself and for the environment. It will -- continues to spend a lot of time with the financial advisors and turnaround advisors who were close these these. Challenged companies. And we worked very closely with them to is to figure out how we -- can play along side with them to restore to -- So will spending more time. On. Exit financing and pre packaged and us and we talked better and what are -- areas and in terms of sectors where you see the most opportunity. Sure I think they continue to be some of the usual suspects. The media space continues speakers stressed. The homeless home building space continues to be stressed and so those companies that -- its suppliers to space are. I'm also. Fine -- her home building. And financial insurance -- here yet health care is actually and real boon for for business. We have seen no more opportunities to its restructuring in past years. And if anything there's more from organic opportunities for the health -- finance group that -- because reform. Okay so keep an island media homebuilding sectors thanks lucky ones you love it thank you Robin Vance senior managing director at GE capital. I'm Fred Katayama this is sort.

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Restructurings to Keep Current Pace

Thursday, October 07, 2010 - 05:02