The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Retail: New Look debt swap is a sign of the times

Restructuring shows vulnerability of highly indebted firms as cycle turns.

shopping-bag-retail-780



“A jolt to the market could come from a well-known name in the retail sector facing difficulties. This could lead to a default which could impact the market. There are a large number of credit funds in, for example, New Look. A company like this defaulting would have a big impact. There are handful of names where if they do hit a wall, people are stuck – they can’t get out.” 

When Jeremy Ghose, managing director at Investcorp Credit Management, made this observation to Euromoney in February 2018, the market was still digesting the fallout from the Steinhoff fraud scandal that had engulfed the margin lending business of several large US lenders. 

He spoke as part of a story examining the impact that years of easy corporate credit might have when the cycle turned.

Now, nearly one year later, New Look has announced a debt-for-equity conversion that will result in bondholders holding over 90% of the equity in the company and reduce existing debt from around £1.35




Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree