Italy, the political situation, its widening spread and the increasingly tense relationship with the EU are as topical as Brexit, these days.

This year is once again set to be a record year for the European non-performing loans (NPL) market, according to new data from Debtwire ABS, presented yesterday (17 October) at Debtwire Week.

We learnt a lot from Debtwire Week 2018, with industry experts taking to the stage to highlight the challenges in the market.

We've put together all the insights from the inaugural Debtwire Week where we discussed leveraged finance, markets and real estate markets. 

Distressed investors have long become resigned to too much liquidity in the European leveraged finance market providing get-out-of-jail-cards to many borrowers, and looming political risks not being priced in. 

Some 200 attendees rolled into Debtwire’s “Leveraged Finance Day” – the opening event for Debtwire Week – at London’s Waldorf Hilton hotel yesterday (10 October) to hear a plethora of opinions and predictions for European leveraged finance, with panel topics spanning the state of high yield bonds and TLB markets, to covenants critique, CLOs and direct lending.

• Continued covenant erosion to hit call protection and see signs of market overheating

• European retail sector has fared well compared to other sectors in spite of uncertainty
• Matalan and House of Fraser have reported positive results amid post-Brexit challenges
• However dark clouds still remain on the horizon as consumers get ever more stretched

Restructuring Day focused on the insights from investors about how they are evaluating distressed opportunities.

• Italy appears to be addressing its EUR 200bn bad debt mountain
• EUR 60.9bn across 16 deals are currently ongoing
• Investors are moving south showing interest in Greece’s EUR 100bn and Portugal’s EUR 36bn debt

Markets Day at Debtwire Week took a closer look at opportunities in Southern Europe and Real Estate.

• EUR 209bn has already been deployed this year across leveraged loans and high yield bonds
• Leveraged loans experienced a record year during the first half of 2017
• Refinanced capital took 61% of transactions during first three quarters of 2017