Project Finance Restructurings and Corporate Debt Restructurings in the Emerging Markets

Abstract

Both project finance and corporate debt restructuring activity in the emerging markets have been increasing sharply in recent years. This article highlights contrasts and similarities between the two. There are contrasts in timing expectations, the nature of negotiations with the debtor, the fundamentals of the debtor's creditworthiness, the nature of standstills, and the central focus of the restructuring exercise. There are often similarities as well such as the key role of strategy in managing the restructuring process, the requirement for effective creditor coordination, the possibility of gaining additional security, efforts to simplify the creditor approval process, the way the negotiation process is driven by recovery expectations of key parties, the importance of early intervention, and the challenge of arranging interim financing.