Taking the Credit — Stresses, messes and addresses
- Josie Shillito
- +Fin Strathern
There are no distressed situations in private credit, so runs the narrative, or at least not in my portfolio. And it’s hard to dispel this myth when the sponsor can put in additional equity, the lender can do debt for equity swaps, and the metaphorical can will be kicked down the metaphorical road without anyone really knowing about it.
But from time to time, something has to go public, as seen with Swedish wall decoration company Desenio. And at this point, private credit funds fond of a trickier situation and the returns that go with it, can swoop.
Desenio is working with private credit funds on financing to save the company from an upcoming 1.1bn SEK (€94m) bond maturity wall. Based off a 11bn SEK valuation (€1.1bn at the time), share prices in the company have fallen 99.3% since going public.