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  "documentTitle": "Distress Alert July 2024",
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      "text": "The great unwinding of corporate leverage is currently underway, with defaults in Europe at their highest year-to-date levels since 2008.",
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      "text": "1 https://www.spglobal.com/ratings/en/research/articles/240612-default-transition-and-recovery-an-increase-in-distressed-exchanges-drives-defaults-in-europe-13145301\n2 https://www.spglobal.com/ratings/en/research/articles/240205-credit-trends-global-refinancing-maturity-wall-looms-higher-for-speculative-grade-debt-12991317",
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      "text": "In this tough environment, firms with business models that are no longer competitive or future-proof are particularly vulnerable to distress. Take the case of consumer businesses, which need to urgently realign their strategy and transform operating models to deal with the shift to e-commerce and rising demand for cheaper and sustainable products.",
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      "text": "The great unwinding of corporate leverage is currently underway, with defaults in Europe at their highest year-to-date levels since 2008, according to S&P Global Ratings¹. Notably, there has been an uptick in the number of distressed exchanges in the region, with over a quarter involving repeat defaulters (issuers with at least one previous default). The rise in repeat defaults shows that corporates have become accustomed to operating with high levels of leverage in their capital structures.",
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      "text": "Business models are vulnerable",
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      "text": "At the same time, we view this turbulent period as an opportunity for companies to pursue simultaneous enhancements in balance sheets and operational efficiency, to strengthen themselves for the long-term. In this report, we explore the key findings of our latest analysis and discuss how the current economic outlook is likely to shape corporates’ financial health in 2024 and beyond.",
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      "text": "Similarly, the energy transition is pushing chemical firms to rethink the way they operate, from the sourcing of raw materials to the diversification of product portfolios. The most recent ADA highlights the scale of the challenge facing these sectors, with firms in the Fashion sector and Chemical sub-sectors among the most distressed.",
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      "text": "The dismal economic outlook has been especially problematic for corporates with overleveraged capital structures. Those firms have been fighting simultaneous headwinds – slowing revenues, inflation and higher cost bases, secular shifts in consumer behaviour, net-zero regulation, and geopolitical risks and uncertainties – all while managing excessive debt burdens amid reduced investor appetite for risk. Deleveraging has been difficult because credit conditions remain tight, meaning cash levels are dropping as businesses dip into their savings to cover their interest payments.",
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      "text": "We anticipate that the surge in distress and restructuring activity, including waiver requests and “amend and extend” transactions, is set to continue in the coming months, particularly as refinancing dates come closer. According to S&P Global Ratings data, $763.2 billion in corporate debt across Europe is expected to mature until end of 2024, with the figure rising to over $961 billion in 2025².",
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      "text": "INTRODUCTION",
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