“If there is an economic blow-out it would be like having a dump of fresh snow,” says an investment banker in distressed debt who, like many in this stigmatised industry, asked not to be quoted.
There has been a dearth of fresh powder in the sector since the glory days of the big bankruptcies of US companies Enron and WorldCom, when there was about $350bn of distressed debt to trade and restructure, say bankers, with a hint of nostalgia. Now, according to financial data provider DebtWire, there is £74.2bn ($140bn). Meanwhile, about $600bn of high-yield debt has been issued between 2002 and 2006, a potential future supply.
