Alternative debt financing, an opportunity in the Nordic countries
Debt refinancing among distressed assets is expected to peak in the Nordic markets, leading non-traditional finance players to increasingly focus on the region. Consultancy.org spoke with Dan Andersson at Alvarez & Marsal to better understand the market opportunity.
Dan Andersson is Head of Nordic Operational Restructuring and CRO Services for Alvarez & Marsal, based in Hamburg. According to him, several factors are paving the way for new models – and players – of debt financing in the Nordic market.
On the one hand, a host of expensive investors are vying for the region’s valuable assets – what Andersson describes as “traditionally attractive investments” – leaving few investment opportunities for small investors and a shortage of funds. financing for financially weaker companies. An already small pool of attractive prospects has shrunk further amid the economic crisis caused by the pandemic last year.
To top it off, a myriad of Nordic companies are reaching maturity on their debt in the near future, putting financing at a premium for the vast majority. While being difficult on the one hand, these market factors create a strong market opportunity for alternative investment models.
Alternative investment models
“Debt levels are mounting and when the dust settles after the pandemic, mountains of debt will need to be refinanced and we expect activity to increase in the restructuring space. The coming wave of restructuring could lead to rewritings of business plans and new balance sheets. “
“Distressed assets and debt / specialist instruments allow other avenues to invest with attractive returns, which has resulted in a greater presence of domestic and international investors such as debt-focused funds and restructuring in the Nordic countries. ”
In an April report, Bloomberg presented London-based debt management firm Global Loan Agency Services as an example of new entrants in the dynamic Nordic market seeking to support distressed assets through debt instruments. specialized debt. In Andersson’s eyes, the Swedish real estate market could be a good starting point for these new entrants.
“According to market colleagues specializing in advising real estate companies, the demand for different sources of debt financing will increase in the Swedish real estate market in the future. “
He continued: “The boom in real estate issuance and the shift from bank debt to high yield bonds has led real estate debt to now dominate the junk and high yield bond market, which is why other sources of debt. debt financing will come in handy. interest during this wave of refinancing.