Post-Covid World Seen Disrupting Nordic Corporate Funding Model

Nordic companies long accustomed to bank or bond market financing may soon have to tap new forms of credit to survive a business climate shorn of Covid support measures and extraordinary monetary policy.

That’s the view of specialist advisory firms such as Alvarez & Marsal Inc., which point to the region’s looming wall of debt maturities as a key catalyst for change.

“After the summer, companies need to rewrite their business plans and come clear on what type of debt they can carry,” said Dan Andersson, the firm’s head of Nordic operational restructuring and CRO services.

Andersson is expecting “specialty instruments” to fill any funding gaps, such as bridge loans and rollover facilities, and with that dynamic comes boutique firms from outside the region to help secure new financing and offer trustee services, he says.

Post-Covid World Seen Disrupting Nordic Corporate Funding Model

One such arrival is London-headquartered Global Loan Agency Services Ltd., or GLAS. Founder and co-chair Mia Drennan says her company is positioning to replace existing creditors when corporate borrowers seek to restructure their balance sheets.

“There’s room for somebody like us because you’ve got a lot of U.S.-style creditors now coming into the region looking for opportunity,” Drennan said in an interview. “The traditional banks don’t want to do what we do.”

Some of the restructurings GLAS has already been involved center on the debt-laden Norwegian offshore drilling industry, including Seadrill Ltd. and Dolphin Drilling ASA.

Drennan says her company is planning to spend “a reasonable amount of time” in the Nordic region once travel opens up.

That’s a view shared by her colleague Matthew Korner, who is helping build out the Nordic business for GLAS. “We definitely see international debt funds playing a much larger role in the market over the next 12 to 18 months,” Korner said. “We’ve seen the club banks struggle to write the same ticket sizes as these debt funds.”

Alvarez & Marsal has similarly been beefing up its presence in the region with expanded operations in Stockholm and Oslo, as well as a new office in Helsinki. “We’re also looking at Denmark with interest,” Andersson said.

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