A $56 Billion Pile of Cash Seeks Home as Distressed Debt Shrinks
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Low rates, rising commodity prices translate to less distress
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‘Low interest rates are letting companies prolong problems’
They raised the money, and now they have few places to put it.
U.S. distressed debt managers have $56 billion to invest, the most dry powder for the industry ever, according to research firm Preqin. But there just aren’t enough bad loans and bonds for them to buy: the amount of outstanding troubled debt has fallen by more than two-thirds since peaking in March, Bank of America Merrill Lynch index data show.
Supply is low in part because of rebounding prices for commodities including oil, boosting revenue for energy companies that would have otherwise gone broke. And the Federal Reserve is expected to keep rates lower for longer than investors planned, which is making it easier for distressed companies to refinance…
A $56 Billion Pile of Cash Seeks Home as Distressed Debt Shrinks
