How Australia’s secondary debt market has changed restructuring

Author: Ashley Lee | Published: 26 Sep 2013
  • Australia’s secondary debt market is more liquid than ever;
  • Following the implementation of Basel III, banks are looking to sell distressed loans to redeploy capital elsewhere;
  • Distressed debt and special situations players are looking closely at Australia, and practitioners expect more informal restructurings than formal processes;
  • However, it’s unclear whether Australia’s liquid secondary debt market will encourage the rest of the Asia-Pacific to develop secondary debt markets.

Australia’s secondary debt market is now more liquid than ever. The development of this market has been a game-changer for banks, investors and distressed companies.

The implementation of Basel III has affected how banks look at their loans to distressed corporates. Rather than hold onto those loans until they require restructuring, banks are now willing to sell...