Arik Kislin : The European Distressed Debt Market Restructuring

June 22, 2010 - PRLog -- The challenge for distressed investors in 2010 will be to find value in this rapidly moving market. Recovery in corporate earnings has yet to match the improvement implied by surging debt prices and liquidity in the secondary market remains poor.

The most popular form of restructuring cited by respondents was covenant resets or amendments, followed by debt buybacks or exchanges. The UK remains the number one jurisdiction of choice for distressed investors, ahead of Germany, while property and construction was the most popular sector for distressed debt investors. Spain will be a huge restructuring market, but it’s hard to see how there will be many going concerns or an open debt market. It’s mostly non-traded bank debt.

“The role of the senior lender has never been so powerful,” said Arik Kislin, Principal at Linx Industries. “In a market where asset values are so depressed and value recovery plans so uncertain it is difficult to see why distressed investors would take the risk of investing elsewhere in the structure until at least they have a foothold in the senior and more visibility.”

Macroeconomic imbalances prompt a wealth of opportunities in the UK, with its over-stretched economy, tightening liquidity, and a decrease in private consumption. Recent economic events should remind investors that there are strong headwinds to recovery and many sources of risk. In considering credit-oriented opportunities, it is essential to combine rigourous top-down macroeconomic insights and fundamental bottom-up company analysis. To lose sight of the numerous and powerful secular forces reshaping the world economy puts any cyclical forecast at risk of misjudging both the rate and amplitude of an economic recovery.

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About Arik Kislin
Arik Kislin is a self-made real estate investor, developer and entrepreneur. Arik Kislin is a principal with Linx Industries, a diversified investment company which includes JetFLight International, a Private Aviation Charter and Management Company, The Gansevoort Hotel Group, and Ocean Blue Management. Mr. Kislin began investing in a financial services firm active in the distressed debt market which manages assets in excess of $2 billion. Arik Kislin is a member of the New York Friars Club. For information see www.arikkislin.net, www.linxind.com, www.arikkislinentrepreneur.com