SRS Acquiom has surveyed direct lenders and their advisors and attorneys for the third month in a row to offer a pulse on the distressed debt and lending activities occurring in the US. The most significant increase our respondents saw for fundings was to borrowers below investment grade.
July results versus June and May demonstrate lenders’ actions are changing: decreases in deferred payments, decreases in additional fundings under existing credit facilities, and increases in prepping for bankruptcies.
Percentage of respondents who report seeing lenders:
- 70%defer payments and waive covenants
- 37%extend funds under existing facilities
- 54%prepare borrowers to file bankruptcy
Our panelists report that 44% of borrowers they see entering into new credit facilities since June 1, 2020 are mostly or entirely non-investment grade borrowers. This is up from 35% at the end of June.
Finally, 19% of panelists report 50% or more of the loan portfolio they or their clients work with currently has a default or waiver in place. This is the highest level reported (12% in June, 16% in May). Similarly, one-third of panelists report that between 25-50% of their loan portfolio is in default or has a waiver in place, up from 17% at the end of June.
While the majority of respondents, or their clients, are still open (29% of respondents) or actively looking for lending opportunities (56% of respondents), 9% now report they are not looking for any lending opportunities. This is the highest level reported in the SRS Acquiom Barometer surveys to date.
If you are a lender or attorney advising lenders and would like to participate in the next SRS Acquiom Barometer survey on Distressed Debt and Lending or other topics, please sign up below.
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Complete Survey Data
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Are you or your clients currently looking for new lending opportunities?
What types of Loans are you seeing close and fund in the market?
(July: Since June 1. June: Since April 1)
What is the financial health of the Borrowers you have seen enter into new Credit Facilities?
What percentage of the loan portfolio you work on is currently in default or has a waiver in place?
Which of the following actions are you seeing Lenders take or pursue in their loan portfolios?
The SRS Acquiom July Barometer survey has a sample size of 46 representing direct lenders, investment bankers, advisors, and attorneys and was fielded July 28-August 7, 2020. The June Barometer survey was fielded June 16-23, 2020; sample size = 35. Sample sizes are more qualitative and directional and the results set differ from survey wave to survey wave.