UK and French Insolvency Regimes will Move Toward German Model, Says Research
Legal initiatives in the UK and France look set to push insolvency regimes in these jurisdictions closer to the German model, according to research by Standard & Poor’s Ratings Services. These moves may have significant implications for banks and investors involved in financing leveraged buyouts (LBO) and senior secured loans, as they are expected to lengthen ultimate recovery times in the UK, and encourage and extend financial support to distressed companies in France. The research evaluates the leveraged buyout (LBO) market in the UK, France and Germany and examines the structural and legal issues facing investors in senior secured and second secured mezzanine loans, and unsecured high-yield bonds. ‘Recent changes to legislation in the UK, as well as draft legislation under consideration in other European jurisdictions, should reduce the traditional distinctions that exist between the principal insolvency regimes in Europe,’ said Dominic Crawley, head of Standard & Poor’s Leveraged Finance team in Europe.