Most Liability Management Moves Only Delay Default, Fitch Says

Liability management transactions in most cases only delay a default for issuers seeking to avoid them altogether, according to Fitch Ratings.

• Borrowers looking to raise their credit profile face varying challenges, the company said in an emailed statement, after analyzing 30 LMTs from distressed issuers with ratings at or below CCC+ at the time of the transactions
  • Hurdles include secular pressures, idiosyncratic business challenges and unsustainable capital structures, the company said in an emailed statement
• “LMTs can materially impact recoveries when issuers subsequently default, depending on lenders’ ability to participate in the new debt,” Fitch analysts Lyuba Petrova and ...