UK Debt markets update 2010

The final quarter of 2009 saw encouraging signs of confidence returning across a broad spectrum of bank lending, so what will the debt markets have in store for 2010? The PricewaterhouseCoopers Debt Markets Update January 2010 explores recent trends in financing, bringing our views and analysis together in one place.

To discuss any of the observations in this report, or to talk about financing requirements or problems with your banks, please contact a member of our Debt Advisory team.

Corporate Lending – increasing confidence and signs of a return to a normalised market

Leveraged Finance – an uptick at the end of 2009 and a healthy pipeline point to gradual improvement

Corporate Bonds - new issue size starting at c.£200m, which should encourage more UK borrowers to consider the capital markets to diversify lending sources and secure longer term debt

Restructurings - a steady stream of borrowers seeking renegotiation of debt facilities, including companies that were the subject of leveraged buyouts in 2005 - 2007

Property Finance - lenders have mostly been supportive where borrowers can service their debts, but take more robust positions, including an equity stake, where there is a new money requirement.

Increasing numbers of lenders offer debt for new deals, but the level of available leverage will leave a significant funding gap on deals with upcoming bullet maturities, which points to a significant amount of restructuring activity in the next 2-3 years.