Blog Post
Octus on Credit: LMEs – Am I a Victim or a Perpetrator?
Luca Rossi, Deputy Managing Editor - Europe
At the recent Octus Credit Forum in London, we explored where we are in the cycle of European liability management exercises: are we still waiting for the wave to break, or have we already reached a peak? And will LMEs replace traditional in-court restructuring processes?
Alongside experts from PJT, Deutsche Bank, Milbank and Sparta, we discussed offensive—not only defensive—cooperation agreements and delved into investors’ current biggest fears: being caught out by information asymmetries and becoming victims of aggressive debt documentation strategies.
Particular focus was given to whether LMEs are exploitative tactics that strip creditors of their acquired rights, or an opportunity for investors to regain control and resolve (part of) the issues affecting borrowers.
The panel presented a nuanced picture, with some skepticism around LMEs and their full viability in Europe, but also an awareness that we are now in a “Brave New World” of distressed debt investing, in which the rules of the game have shifted.
The day after the event, we reported that a group of Kem One‘s bondholders led by investment funds Arini and BlackRock, and advised by Gibson Dunn, is considering providing new super senior money to the ailing French chemicals producer and potentially uptiering its 2028 senior secured bond holdings into new 1.5 lien notes.
Following news of the potential LME and our detailed covenant analysis, Kem One’s bonds tanked 15 points. Are creditors pricing in another US-style aggressive transaction?
Join us to continue this conversation at our upcoming webinar, LME’d, Now What? Challenges And Opportunities After The Deal, hosted in partnership with Paul Hastings on Thursday, Nov. 6, at 11 a.m. ET.
To get these insights in real time, sign up to receive Octus on Credit directly in your inbox every week.
This publication has been prepared by Octus, Inc. or one of its affiliates (collectively, "Octus") and is being provided to the recipient in connection with a subscription to one or more Octus products. Recipient’s use of the Octus platform is subject to Octus Terms of Use or the user agreement pursuant to which the recipient has access to the platform (the “Applicable Terms”). The recipient of this publication may not redistribute or republish any portion of the information contained herein other than with Octus express written consent or in accordance with the Applicable Terms. The information in this publication is for general informational purposes only and should not be construed as legal, investment, accounting or other professional advice on any subject matter or as a substitute for such advice. The recipient of this publication must comply with all applicable laws, including laws regarding the purchase and sale of securities. Octus obtains information from a wide variety of sources, which it believes to be reliable, but Octus does not make any representation, warranty, or certification as to the materiality or public availability of the information in this publication or that such information is accurate, complete, comprehensive or fit for a particular purpose. Recipients must make their own decisions about investment strategies or securities mentioned in this publication. Octus and its officers, directors, partners and employees expressly disclaim all liability relating to or arising from actions taken or not taken based on any or all of the information contained in this publication. © 2025 Octus. All rights reserved. Octus(TM) and the Octus logo are trademarks of Octus Intelligence, Inc.