Emerging market HY restructurings ahead

Author: Lizzie Meager | Published: 17 Sep 2015

A report by Orrick Herrington & Sutcliffe, released today, has highlighted the risk of high-yield (HY) bond defaults. While the European market in particular has experienced a boom in recent years, a near-zero rate of default is an historic anomaly, claims the report.

Stephen Phillips, partner and co-head of European restructuring group at Orrick and author of the report, said that he expects to see a lot of HY restructurings in emerging markets in particular in the near future.

"The market share of high-yield in the emerging markets has shot up and, with the current troubles in many of these markets – particularly oil – we expect a fair amount of distress," he said.

Because a large...