Money Makers Mentor

PE Firms See 100 Fewer Distressed Assets in Q3 than Q2

The U.S. economy continues to suffer from the COVID-19 pandemic. But as bankruptcies and defaults continue to pile up, private equity firms appeared to slow the bleeding for their portfolio companies.

In all, just 39 private equity-backed companies were considered distressed in Q3 2020. A distressed rating is defined as an issuer credit rating of B- or lower with a negative outlook from S&P or a corporate family rating of Caa1 or lower with a negative outlook from Moody’s.

Additionally, seven private equity portfolio companies end the quarter with a default rating, indicating a Chapter 11 filing or default of a loan payment.  

Both are significant drops from the highs of Q2, in which there were 138 distressed assets and 15 defaults.

Source: The Buttonwood Tree


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