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January 10, 2024

Gary Bellingham Shares Insight on Refinancing Pressures in Property Week

In Property Week’s recent article, “Debt crisis looms for 2024 as firms face ‘refinancing gap,’” finance and restructuring partner Gary Bellingham comments on refinancing pressures in 2024.

He shared that the pressures will start to become more evident this year as more borrowers face having to refinance cheap debt with much more expensive loans. So, there will be questions about how much debt the underlying assets can support.

Higher debt costs, weaker rental income and reduced asset prices are putting stress on both interest cover and loan-to-value financial contracts.

Bellingham noted, “There is some unease in the market about 2024 being the year of the refinancing gap: the amount a new lender is willing to lend against an asset may be significantly lower than the amount needed by a borrower to repay its existing lender.”

“In this scenario, we are likely to see more forced sales of assets, which in turn could lead to more downward pressure on asset prices and lower valuations.”

The full article is available to Property Week subscribers.

Full Article

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