Distressed Borrowers Seek Creative Lending to Survive Virus (1)

When PizzaExpress <-bsp-bb-link state="{"bbDocId":"Q7DTDYT1UM1A","_id":"00000171-30e7-d981-a97d-fbf719550000","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">secured a new loan from a private credit firm earlier this month, it was forging a path other cash-strapped companies will likely follow in the era of coronavirus.

The distressed U.K. restaurant chain obtained 70 million pounds ($86 million) from HPS Investment Partners in mid-March. As a super senior loan, it will be repaid first in the event of a collapse. Now other companies are looking for investors willing to provide emergency cash at the most secure part of the debt stack.

Where contracts allow, this kind of borrowing could spell the difference between companies’ failure or survival. ...