FICC Focus State of Distressed Debt: Houlihan Lokey’s Tuck Hardie Is Back
32 snips
Nov 7, 2025 Joining the conversation is Tuck Hardie, Managing Director at Houlihan Lokey, who brings 25 years of restructuring expertise across various industries. He discusses the workout landscape and how recent court rulings may empower minority lenders in distressed debt situations. Tuck also highlights the impact of policy volatility on investor preferences for debt over equity and critiques the challenges of management incentives amid financial distress. The conversation wraps up with insights on capital solutions and bespoke financing strategies for struggling businesses.
AI Snips
Chapters
Transcript
Episode notes
Market Complacency Raises Vulnerability
- High-yield markets look resilient but the distress ratio is inching up and spreads are at historic lows.
- Phil Brendel warns this late-cycle complacency makes the market vulnerable to a sharp pullback.
LMEs Can Reduce Future Recoveries
- LMEs and pick-interest deals delay restructurings but often reduce recoveries by adding super-senior layers.
- Tuck Hardie says deferrals are cheaper and faster but can make later restructurings harder and hurt first-lien recoveries.
Weigh Restructuring Versus Can-Kicking
- Avoid reflexive can-kicking; creditors and sponsors should assess whether a true restructuring is needed now.
- Tuck urges stakeholders to weigh long-term recoveries against the short-term convenience of LMEs.