Insights – Key takeaways from panel discussion on “Developing a Market for DIP Financing” from SGRI Conference 2025
An engaging and insightful panel discussion on “Developing a Market for DIP Financing” from the Singapore Global Restructuring Initiative (SGRI) Conference 2025 held at Singapore Management University on 5 August 2025.
The panel discussion was chaired by Scott Atkins (Australian Chair and Global Head of Restructuring, Norton Rose Fulbright) and included panel members, Professor Anthony J. Casey (Donald M. Ephraim Professor of Law and Economics; Faculty Director of the Center on Law and Finance, University of Chicago Law School), Jacqueline Chan (Partner, Milbank), Anurag Das (Managing Partner, Rain Tree Capital), Darius Tay (Restructuring & Insolvency Partner, Bird & Bird ATMD) and David Chew (Partner, DHC Capital).
Key takeaways from the panel discussion:
Four levels of super-priority rescue financing are available under Section 67 of the Insolvency, Restructuring and Dissolution Act (IRDA)
Limited local scale. To date, nine successful deals have been completed. Most cases so far have used the 2nd and 3rd levels of rescue financing. There have been no cases involving the 4th level (priming)
Small deal sizes. Mostly small transactions (except for the Design Studio Group case) involving simple capital structures that have little relevance to large global investors
No regional cases involving larger companies to create global investor interest
Roll-up financing, where existing debt is consolidated into new super-priority debt, is now accepted by the Singapore courts
The limited attractiveness is due to:
Filing companies often lack the assets or cash flow to support rescue financing (e.g. unsustainable business models, no underlying value, minimal hard assets)
The Singapore framework requires moratorium support from key creditors, and banks, often the lead creditors, will oppose priming security. In many cases, their existing security is already out-of-the-money, leaving no surplus value to prime
Distressed companies may have alternative options offering greater certainty than court-backed DIP financing
The absence of large, multi-lender cases reduces appeal for bigger, non-Singapore companies. Complex cross-border capital structures, often involving active debt trading, can push such companies towards more familiar jurisdictions and out-of-court solutions
Potential drivers for increased use of super priority rescue financing in Singapore:
Legal regime is familiar and trusted backed by the credibility of Singapore’s legal system. Courts have been receptive and the jurisprudence in this area is continuing to evolve
Local market:
Benefit of time. Need to see continued use by local companies with filing companies presenting viable businesses and credible restructuring proposals leading to more successful precedents
Increased secondary debt trading in the bank, bond, and private loan markets, attracting new capital providers interested in capital-led rescue and turnaround
Regional and global market:
Building trust in the Singapore framework through the role of the Singapore International Commercial Court (SICC) and its roster of specialist judges with Chapter 11 experience, to provide comfort to large overseas companies and financiers
Harmonisation of laws. Ability for a Singapore Court order to have effort and enforceability in regional markets (e.g. enforceability with Malaysia and vice versa as Malaysia has adopted the same laws as Singapore on super priority, amongst other new corporate restructuring laws)
About SGRI
The Singapore Global Restructuring Initiative is a project launched by the Singapore Management University with the support of the Ministry of Law that seeks to promote research on restructuring and corporate insolvency law while promoting cooperation between academics, practitioners, judges and policymakers from all over the world.