The combination of rising rates and a new political regime in the U.S. will bring about an uptick in corporate restructurings outside the energy space, creating new opportunities for investors in the riskiest parts of the debt market, Bloomberg News reported on Friday. That’s one of the conclusions from interviews with bond traders, bankruptcy lawyers, financial advisers and fixed-income analysts about the outlook for 2017. Investment options will become more diversified as the primarily energy-driven distressed market of recent years will broaden out, according to Tim Coleman, head of restructuring at PJT Partners Inc. Sectors to watch could include utilities, health care providers and more companies in the struggling brick-and-mortar retail sector. “We’re going to see more ordinary restructurings instead of just a lot of commodity-driven activity,” said Coleman, who has worked on major corporate restructurings including Ford Motor Co. and Delta Airlines Inc. “That’s probably better for the distressed space.” Restructurings will happen in certain pockets of pain where the broader economic trends exacerbate existing problems and “weed out very quickly those companies that have borrowed too much,” according to Mike Barnes, co-chief investment officer at Tricadia Capital Management, which oversees $2.8 billion.
