1 minutes to read by  BlueBay Fixed Income team, A.Phillips, D.Farley May 23, 2025

The rise in liability management exercises can be attributed to a combination of factors, including weak credit documentation, rising debt costs, impending maturities, and the efforts of resourceful sponsors seeking to unlock equity value.

Key takeaways

• Distressed investing entails investing in companies that we believe will need to restructure, either operationally or financially or, in some cases, both. Recently it has become apparent that it is no longer assumed that investors can sit on the sidelines and expect fair treatment. This trend first started in the US with the rise of liability management exercises (LMEs), and it has now been seen on European shores.

• In our piece, we aim to educate readers both in terms of what LMEs are and the strength of our approach of investing in mid-market European companies due to the strength of legal dynamics, simpler capital structures, and the ability to have influence over restructuring proceedings.

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