Mid-sized enterprises are renegotiating debt terms as low-yield corporate bonds issued during the previous decade reach maturity. Borrowing costs have doubled for secondary credit ratings, constraining corporate capital allocation.
Balance Sheet Defense
Chief Financial Officers are issuing structured equity and mezzanine debt to defer high interest payments. Share buybacks and non-essential M&A activity have slowed substantially across consumer sector firms.
Outlook for M&A
Private equity funds with substantial dry powder are targeting distressed mid-cap assets, seeking carved-out operations at discounted valuations.