04.11.2015, 07:45
Fitch Analyzes First Lien Issues with Atypically Low Recovery Rates
OREANDA-NEWS. Low recovery rates for debt issues secured by a first lien on assets are unusual in U.S. bankruptcy cases, according to a new Fitch Ratings' report. An analysis of 181 defaulters in Fitch's bankruptcy case study database identified 25 cases with first lien loan or bond recoveries of less than 50%, including 12 cases where recoveries were below $0.30. Drivers and common themes in these cases were studied.
The Table of Contents is as follows:
--List of Outlier Issues and Recovery Rates
--Contractual or Structural Disadvantages
--Split Collateral
--Cyclical Trough
--Flawed Business Model --Secular Decline
--Outlier Issuers Compared With Broad Group
--Bankruptcy Case Outcomes
See Fitch special report, First-Lien Issues with Poor Recovery Rates dated Nov. 3, 2015.
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