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Recent Editions
Risk Channel
North America
Private-equity firms are facing mounting financial pressure as approximately $300bn in corporate loans approach maturity in 2028 and 2029, raising concerns about defaults and investment losses. Around $140bn is due in 2028, followed by $160bn in 2029, with software companies accounting for approximately one-third of the total. Rising interest rates, weaker refinancing conditions, and growing competition from artificial intelligence companies have complicated efforts to extend debt maturities. Approximately 25% of the outstanding loans carry particularly low credit ratings, increasing the risk of defaults and creditor takeovers. Bank of America forecasts that default rates on below-investment-grade corporate loans will double to 4% next year. Private-equity returns have already fallen below 10% from approximately 15% during the low-interest-rate period. Fund managers are increasingly negotiating loan extensions, injecting additional capital, and restructuring company balance sheets to avoid potentially significant losses.
Full Issue
Risk Channel
UK/Europe
UBS chief executive Sergio Ermotti has expressed his concern about proposed capital rules that could hinder the bank's global competitiveness. He said that the lender is at a "critical juncture" as it evaluates the long-term effects of these regulations. The rules would require UBS to hold an additional $16bn in capital. Ermotti noted that the impact on shareholders is not being considered, despite their role as a financial buffer. He also mentioned that discussions about relocating the bank's headquarters have taken place. One of the bank's major investors, US-based Artisan Partners, has called for it to move abroad, saying that Switzerland was no longer an attractive or desirable location for the business.
Full Issue