Remember all of those early year surveys about where the distressed activity was going to be? Yeah, so do we. Everyone was bullish about healthcare distress. And, sure, there have been pockets here and there but nothing that’s been truly mind-blowing in that sector. In other words, wishful thinking. Unless you’re DLA Piper LLP, the (limited) healthcare activity has meant basically f*ck all for you.
Fitch Ratings recently released a report indicating that it expects healthcare-related defaults to remain low. Choice bit:
"We don't see any catalyst for there to be a great increase in defaults in the sector," said Megan Neuburger, Fitch's team head for healthcare and an author of the report. "It tends to be a fairly stable sector from a cyclical perspective, so the drivers of bankruptcies tend to be more idiosyncratic."
In other words, the chief drivers of healthcare bankruptcies aren't the same as in other sectors, which are more influenced by economic downturns or factors related to the commodity cycle, she said. Neuburger said her team doesn't see any catalyst on the horizon that would prompt an uptick in healthcare defaults this year or in 2019.
We’ll see if the early 2019 surveys reflect this view.