Posted: 12 Jun, 2018
Freshfields kindly hosted and sponsored our London event last week - an update on European Restructuring law expertly delivered by doyen of the industry Richard Tett in customary and consummate style. What is clear is that the continental European jurisdictions have been modernising whilst UK plc has been occupied elsewhere on legislation and change, latterly on Brexit. This is not to say that The Scheme of Arrangement is dead, nor Administration or the CVA but he was signalling a move to the Dutch Scheme for larger cross border situations which has advantages over UK law. Ultimately London still has inherent advantages (scale, language, experience of both professionals and the courts), which Europe was happy to accept, but this is likely to be challenged as the UK becomes less of a partner and more of a rival.
Richard, was then joined for a panel debate with audience participation by Stuart Mathieson from Barings and Lee Rogerson from Freshfields. Stuart observed that Brexit was in many ways just another variable that an investor had to consider in deciding whether to participate in a given deal. What investors don’t like is uncertainty, so it was clearly not seen as a positive, but by and large had done little to dampen demand for high yield and investment grade debt. Richard agreed that there was little sign of terms tightening on debt issuance, be it bond or debt. At the larger end of the market covenant protection has all but disappeared. This is exasperated by the number of adjustments allowed to EBITDA calculations. In response to questions from the audience, it seems that, although it is easy to conclude that the market is overheated, it is difficult to see any particular event that could change current investor sentiment. Finally we were left with the thought that a snap general election is seen as very unlikely - with no one very keen to want to take over running the Brexit process. The audience then adjourned to continue the discussions, networking and first rate hospitality from Freshfields. Many thanks to Richard and his team for another outstanding event.
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