The outlook for restructuring and consensuality, by Stuart Mathiesonp

As European loan investors reflect on what was a record year for both loan market returns and the number of recorded defaults, the primary market is at last starting to show some signs of life. But the backdrop remains one of shallow economic growth and slow demand recovery which is likely to take several years to reach the levels seen in 2007. Consequently S&P are forecasting that the European speculative grade default rate will remain high in 2010 at between 8.7-11.1 per cent. At the same time a recent Debtwire investor survey highlighted that 46 per cent of respondents believe this cycle’s restructuring activity in Europe will peak in the first half of 2010, writes Stuart Mathieson, managing director at Babson Capital Europe.