Revolving credit facilities remained a critical tool for companies, with overall robust recoveries for both asset-backed loans (ABL) and cash flow revolvers, according to a new Fitch Ratings report.

"The pandemic fostered increased revolving credit facility borrowings, leading to an average 88% utilization rate across all revolvers for issuers that filed in 2020, the highest individual year in the study, and compared to a 78% average for 2019 and older filers," said Judah Gross, Senior Director.

Utilization rates for both ABL and cash flow facilities with usage disclosed as of the bankruptcy petition date were 79% when separately averaged for the two cohorts.

Revolver facilities averaged an 88% ultimate recovery, with asset backed loans recovering an average 96%, versus 82% for cash flow revolvers.

Recovery distributions for revolver claims were paid exclusively in cash, including debtor-in-possession facility roll-ups, for 65% of the claims. The remainder were largely satisfied by various combinations of cash, new debt and new common equity.

The full report titled "U.S. Leveraged Finance Restructuring Series: Revolving Credit Facility Performance in Bankruptcy" is available at www.fitchratings.com.