As bleak as the economy has been during the COVID-19 pandemic, October brought good news for private equity-owned companies. October marks the second consecutive month of decreased distressed assets.
Even better for the industry, the 13 total distressed assets were the fewest on record since The Buttonwood Tree began to track distressed assets in April. Of concern, however, was that October also marks the second consecutive month of increased defaults.
In all, eight portfolio companies received distressed ratings and five defaulted on loans during the month of August 2020. Though the total was the lowest on record, defaults were the highest since June.
Source: The Buttonwood Tree; Moody's; S&P
Distressed ratings are defined as an issuer credit rating of B- or lower with a ...