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Several bankruptcies this year have involved borrowers with large securitization financings that, while ‘bankruptcy remote’, can become impaired in a restructuring or be a financing solution out of distress, focusing attention on how ABS creditors can navigate these situations.

2025 has seen the whole business securitization of Hooters put into restructuring, while solar firms Solar Mosaic and Sunnova have seen distributed ABS deals partly insulated from the troubles of the corporate. For other debtors, ABS has proven a lifeline. Zayo’s capital structure was tottering in January, but this year, the communications infrastructure group has been the largest single fiber ABS issuer, putting it on a more stable footing for an A&E.

The sudden and very public downfall of Tricolor Holdings is a different case, with Wall Street banks and ABS holders left to probe the state of their collateral after it was allegedly pledged to multiple creditors — but the possibility that public and private ABS structures may not always be what they seem has shone a light on the details of these structures. The descent of First Brands also highlights mounting scrutiny around its opaque financing structures, with a bombshell complaint alleging strategies — including fake invoices and double pledging of collateral — employed by founder and former CEO Patrick James that led to billions of dollars of accounts receivable factoring liabilities and helped fund his lavish lifestyle.