U.S. Leveraged Loan Sales Hit Record $986 Billion in Repricing Run​​​

Companies have issued a record $986 billion of debt in the U.S. leveraged loan market this year, mostly to cut interest expenses on existing debt, Bloomberg News reported. This year’s figure surpasses 2017’s as the busiest year for new issuance, according to Bloomberg-compiled data going back to 2013. Most of this year’s volume has come from companies refinancing current obligations or locking in lower margins through repricing. The types of deals getting done underscore a painful market dynamic for investors: too much leveraged loan demand and not enough supply of new debt for uses like buyout financing. Issuers are able to slash margins anywhere from a quarter to three-fourths of a percentage point as lenders are more willing to take the cut given a dearth of opportunities to fund acquisitions. Borrowers, on the other hand, are taking advantage of healthy secondary trading levels — which have recovered to 97 cents on the dollar — to get better terms on their loans. Read more.

Commentary: U.S. Hospitals Are Hanging by a Thread*​​​

The confounding economics of U.S. health care are one reason that in 1960, the country had roughly 9.2 hospital beds per 1,000 people; but today, that ratio is only about 2.3, according to a Bloomberg commentary. Hospital cutbacks and closures have expanded America’s medical deserts — places without nearby health care facilities, or where long waiting times or high costs mean local people can’t get timely care. When hospitals close down, the doctors who worked there often retire or relocate, points out Alan Sager, a professor of health law, policy and management at Boston University. Some have surely been mismanaged — Steward Health chief among them — but others have struggled for reasons outside their direct control, according to the commentary. The result is that more than 1 in 3 people in the U.S. live in counties without adequate medical care, according to a report by GoodRx, an app that provides prescription drug information and telemedicine services. The problem is particularly acute in rural areas. But it’s also found in some parts of large cities like Chicago, Los Angeles and New York. According to data compiled by BU’s Sager, the urban hospital closures of the last 50 years have been disproportionately in Black neighborhoods. The declining number of hospitals coincides with some depressing declines in health care metrics. In 1980, the U.S. had similar life expectancy rates to its peer countries; but over the last 40 years, it has fallen behind. And in the past 20 years, U.S. maternal mortality rates have also turned in the wrong direction. The scale of health care spending and the overwhelming demand for care have made hospitals attractive targets for private equity, which seems to think it will have better luck turning them into profitable businesses. But in reality, PE ownership hasn’t been good for patients, and while the firms might provide a temporary financial boost, in the long run, they don’t always save hospitals from closing. Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

Analysis: The Sandwich Generation Is Stressed Out, Low on Money and Short on Time​​​

More Americans shoulder a double load of caring for their children and at least one adult, often a parent. The “sandwich generation” has grown to at least 11 million in the U.S., according to one estimate, and shifts in demographics, costs and work are making it a longer and tougher slog, the Wall Street Journal reported. People are having children later, and they are living longer, often with care-intensive conditions such as dementia. That means many are taking care of elderly parents when their own kids are still young and require more intensive parenting — and for longer stretches of their lives than previous generations of sandwiched caregivers. The financial pressures are also growing for the sandwich generation. According to a Care.com survey of 2,000 parents, 60% of U.S. families spent 20% or more of their annual household income on child care last year, up from 51% of families in 2021. Meanwhile, the median cost of a home health aide climbed 10% last year to $75,500, data from long-term-care insurer Genworth Financial show. Caregivers often risk paying for such costs in their own old age, financial advisers say. More than half reported in a 2023 New York Life survey that they had made a sacrifice to their own financial security to provide care for their parents on top of their children. (Subscription required.) Read more.

U.S. Weekly Jobless Claims Fall; Continuing Claims Hit Highest Level in Three Years​​​

New applications for U.S. unemployment aid unexpectedly fell last week, but the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions, Reuters reported. The second straight weekly drop in filings for state unemployment benefits reported by the Labor Department on Thursday likely reflected an ebb in claims from Hurricane Helene, which earlier this month had boosted applications to the highest level in nearly 1 1/2 years. The rise in claims related to Hurricane Milton has been more muted than initially feared. Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 227,000 for the week ended Oct. 19, the Labor Department said. Unadjusted claims declined by 22,634 to 202,635 last week. A jump of 4,275 in filings in Florida was more than offset by significant decreases in Georgia, North Carolina, New York and Texas, as well as Tennessee, Ohio and Michigan. The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose 28,000 to a seasonally adjusted 1.897 million during the week ending Oct. 12, the highest level since mid-November in 2021, the claims report showed. Read more.

Analysis: Retail Space Is Going Fast and Pushing Out Local Shops​​​

Landlords, who struggled for years to fill vacant storefronts, now have the upper hand in rent negotiations. That is pricing out a lot of small businesses that can’t compete with deep-pocketed national chains for limited store space, the Wall Street Journal reported. Nearly six in 10 small businesses said that their rent had increased over the past six months, and more than half of independent retailers couldn’t pay their September rent in full, according to a survey by business-networking platform Alignable. Everything else being equal, property owners like the idea of renting to independent shops and restaurants. These businesses generate loyal local followings and help differentiate their properties from online offerings. But the prospect of higher rent is hard to resist. Rising rent prices come on top of other small-business hardships, such as the struggle to retain good employees and secure affordable business loans. Early on in the pandemic, some business owners were able to negotiate lower rents as the future of in-person shopping and crowded cities was still in doubt. (Subscription required.) Read more.

Don't Miss Part 1 of ABI's Consumer Practice Extravaganza Nov. 11-12!​​​

ABI's Consumer Practice Extravaganza, the largest online consumer bankruptcy practice event of the year, will be delivering so many great sessions that it has been split into two parts! The first part will be taking place Nov. 11-12, featuring the following panels:

- "Combating the Creative Consecutive Filer"
- "Explaining Racial Disparities in Personal Outcomes"
- "Issues Spotting and Preparing Schedules Properly for Consumer Bankruptcy and Family Law Issues"
- "Injunction of Law in Light of Purdue Pharma"

For just $100, attendees will be able to access live programming, or watch recordings to experience the conference on your schedule! All November Part 1 programs, plus Part 2 sessions taking place in January 2025, are included in the registration price. Register today!

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and 'X' (Formerly known as Twitter)!