Blackstone’s Coleman: Libor Remains Key Pricing Tool for Debtor in Possession Finance

Libor remains a key pricing tool for loans to bankrupt companies despite an investigation of at least 12 banks for manipulating Libor, says Timothy Coleman, senior managing director and head of restructuring and reorganization at The Blackstone Group.

Coleman said in an interview with Aleksandrs Rozens that he expects more Chapter 9 bankruptcy filings and restructurings within energy, media and healthcare industries. “Energy appears to have had a fundamental shift due to many issues including fracking,” he said.

Q: Given the issues with Libor, does this change the mechanics of debtorin- possession lending?

A: I have not seen any change in the DIP loan process as a consequence of all of this controversy surrounding Libor. Perhaps it will, but I haven’t seen any difference to date. Everyone continues to use Libor as the key rate.

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