RESTRUCTURING: Distressed exchanges boost recoveries
Recovery rates for distressed debt have fallen during the latest restructuring cycle, according to Standard & Poor’s, but a trend toward distressed debt exchanges in the last cycle pumped up recoveries for junior bondholders. During the period from 2008, encompassing the collapse of Lehman Brothers, through October 2010, recovery rates averaged 45.6% across all debt instruments, some 5.5% lower than the average during the period from 1985 to 2007.
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