Credit: Phawat/AdobeStock How to Win at Restructuring in the Gilded Age of Private Credit
As private credit gobbles up market share from broadly syndicated loans, law firms not already steeped in direct lending are building multifaceted practices to avoid losing restructuring work to better-positioned peers.
August 19, 2024 at 10:00 AM
7 minute read
What You Need to Know
- Private credit now fuels more restructuring work than bank loans at many Big Law bankruptcy practices.
- The shift is pressuring firms to hire restructuring partners and finance partners with connections to direct lenders.
- While broadly syndicated loans are beginning a comeback, practitioners believe much of the market has shifted to direct lending for good.
Back when broadly syndicated bank loans reigned supreme in debt finance, law firms that lacked longstanding relationships with the banks writing the loans were at a disadvantage when it came time to restructure a deal.
If you weren't an experienced partner with connections to institutional lenders, entire swaths of the market could be out of reach, said Goulston & Storrs restructuring partner Timothy Carter. Recently, an in-house restructuring lawyer at a major bank told Carter, "I only have (outside counsel) my age that work for me," Carter recalled him saying. "That's 17 guys and they're all in their 60s."
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