This report offers our perspective on the three-to-five-year outlook for the global restructuring market. With private credit established as a dominant force within the credit landscape, our analysis focuses on how we expect the market to evolve and what this means for lenders operating within the sector.
Our conclusions draw on Teneo’s unique understanding of the market, informed by the high-profile engagements that we support, combined with a rigorous analysis of third-party data from the likes of Bloomberg, national statistical offices, specialised data providers and leading asset managers.
Hear from Dan Butters, CEO of Teneo's Financial Advisory business, for his insights on the report's findings and the forces reshaping the restructuring landscape.
Key Findings:
The Macroeconomic Outlook
The restructuring market is entering a new phase after years of abundant liquidity and amend-and-extend (A&E) strategies that allowed companies to defer financial stress. More than $1.4 trillion of high-yield (i.e. poorer credit quality) debt is due to mature in 2026–2027 alone, and $3.6 trillion between 2028–2029, creating a refinancing wall significantly larger than that seen during the Global Financial Crisis (GFC). Against a backdrop of higher borrowing costs, tighter liquidity and macroeconomic uncertainty, private lenders are becoming more disciplined and increasingly proactive in managing stressed credits.
The Limits of the “Extend and Pretend” Era
Out-of-court solutions are increasingly being used instead of formal restructuring processes, as they are often viewed as faster and less costly. These fixes – including A&E transactions, sponsor support and distressed disposals – may provide temporary relief but are only effective when paired with genuine operational improvement. Where challenges are structural rather than cyclical, more comprehensive restructurings often become unavoidable.
Private Credit Faces Its First Major Stress Test
Private credit continues to grow, but the market is entering its first major refinancing and restructuring stress test. Reported defaults may understate underlying pressure due to widespread A&E activity and payment-in-kind (PIK) features, while recent fraud allegations have intensified scrutiny around transparency and governance. Liquidity mismatches and rising convergence between public and private credit markets are increasing restructuring complexity as 2019–2021 vintage debt approaches maturity.
What This Means for Private Lenders
As refinancing pressure rises, private lenders are placing greater emphasis on underwriting discipline, proactive portfolio management and earlier intervention to preserve value. At the same time, many firms are expanding in-house restructuring and workout capabilities as the current environment drives a broader period of market normalisation and recalibration across private credit. Industry consolidation is also expected to accelerate as managers seek greater scale, diversification and operational capability in a more challenging market environment.
Sectors Most Exposed
Areas currently under strain include commercial real estate, retail and consumer, hospitality, industrials, transport, chemicals, automotive suppliers and parts of software and business services. At the same time, private equity activity has slowed as sponsors delay exits amid persistent valuation pressure and macroeconomic uncertainty.