Financial media recorded an unusual move by JPMorgan bank – direct financing of the struggling debtor Altice USA – as an event that shook the so-called “distressed” debt market.

JP Morgan crosses the line in the Altice USA case. JP Morgan Chase & Co, the largest American bank, caused a real storm on the financial market at the end of 2025 by approving an extremely risky loan to the struggling telecommunications company Altice USA. Altice USA, the American branch of the telecom empire of businessman Patrick Drahi, was already burdened with billions of dollars of debt and faced extremely high interest rates on its existing obligations. In November 2025, Altice urgently needed fresh capital in order to refinance one of its loans that was maturing, but it was hitting a wall with its existing lenders. At that moment, JP Morgan stepped in and directly placed about USD 2 billion of new lending to Altice, which is a precedent for such a large commercial bank in the distressed debt market. Even more dramatically, just a few hours after this arrangement was announced, Altice USA filed a lawsuit in federal court in New York accusing a group of its largest creditors of having formed an illegal “cartel” in order to block its debt-restructuring efforts.

Negative investor reactions and why the move is unprecedented.
JP Morgan’s unexpected loan to Altice shocked many investors in the risky-debt market. Existing creditors – mostly investment funds specialized in distressed investments – greeted the news with disbelief and anger. One manager of a large fund called this event “unprecedented” and stated that “this is the craziest thing that has happened in the history of the distressed debt market,” alluding to the fact that a large bank had taken on a role typical of hedge funds and private lenders. Why was the reaction so fierce? First of all, JP Morgan’s move primarily protects the bank’s interests at the expense of other creditors. The new USD 2 billion loan is secured by Altice’s assets, which gives it priority of repayment over earlier debts. This practically weakens the position of existing investors, who expected that any new financing would come with their participation or approval, and not behind their backs. It is therefore not surprising that they characterized such a move as crossing the line of unwritten rules in the world of debt restructuring. An additional layer of irony is the fact that among the creditors Altice is suing is the investment division of JPMorgan itself (JPMorgan Investment Management), which participated in an earlier syndicated loan to Altice. This obvious conflict of interest – that the creditor bank grants a new loan while its investment subsidiary sits on the “other side of the table” – further undermined investor confidence.

The role of large funds and the practice of distressed financing.
To understand why this is a precedent, it is necessary to look at the broader context of the market for risky corporate debt. Traditionally, companies in financial trouble (so-called distressed firms) rely on specialized investors for rescue loans, not on large commercial banks. After the global financial crisis of 2008, regulation and caution pushed banks to stay away from very risky loans, leaving room for huge investment funds such as Apollo Global Management, BlackRock, Ares Management, Oaktree Capital and others to step in. These alternative lenders raised billions of dollars of capital precisely to finance high-risk companies that traditional banking had turned its back on. They provide so-called private credit – private loans with high interest rates and stricter conditions – and often take control or significant influence in the companies they rescue. Unlike banks, these funds are willing to take on greater risk in exchange for potentially higher returns. JP Morgan’s case with Altice is so significant because a large bank entered territory reserved for these funds, and did so in a way that bypassed the existing group of creditors. Specialist media note that the corporate credit market has recently been increasingly intertwining – direct lenders refinance banks and vice versa – but even in such a climate, such an aggressive move by a bank is very unusual. According to the Financial Times, JP Morgan acted this way because it believed that otherwise private funds would lend to Altice through another legal structure, whereby valuable Altice assets would “slip away” from existing creditors – including JP Morgan itself, which had been one of the earlier lenders. In other words, the bank assessed that it was better to retain control over refinancing the client than to leave the profit (and collateral) to the competition. Nevertheless, this decision by JP Morgan met with condemnation – investors say that no bank to date has so directly “run over” the interests of its partners in a lending consortium, which is a signal that boundaries in the world of finance may be shifting in a way that brings new risks.

Why are banks in Southeast Europe more conservative?
Such a scenario is unlikely to be seen any time soon in the markets of Bosnia and Herzegovina, Serbia, or the wider region. Banks in Southeast Europe, mostly subsidiaries of large European banking groups or state-owned banks, are known for a fairly conservative approach to corporate lending. They focus on traditional loans with solid guarantees and collateral, while as a rule avoiding high-risk arrangements with struggling companies. The high capital adequacy ratios that banks in the region maintain reflect the perception of high risk in the economy and the fact that local capital markets are shallow and underdeveloped. In other words, neither banks nor companies in the region have much experience with complex distressed-debt financing – such deals are generally not offered, nor does the economy expect them. When a firm falls into serious liquidity problems, local banks will sooner restructure existing debt (if they see business sustainability) or even write off part of their exposure, rather than approve a new risky loan to the same client. Often a buyer or strategic partner is sought to take over the struggling company, instead of financing its survival through bank loans. Because of such caution, no significant secondary market segment for “bad” debts has developed – problematic exposures in the region are mostly sold to specialized foreign funds or collected through bankruptcies, rather than serving as a basis for domestic distressed-debt investments. Banks also require high collateral and a healthy balance sheet from companies they lend to, which many firms in difficulty simply cannot meet. This conservative approach protects the banking sector from large losses, but at the same time means that domestic companies in trouble do not have many options – if they fall into financial difficulties, it is unlikely that a local bank will step in with a risky loan following the JP Morgan–Altice example.

Lessons for the business community in the region.
The most important lesson that this unusual case carries for the regional business community is the importance of trust and consistency in financial relationships. In developed markets, where deep pools of capital and complex instruments exist, moves are possible that dramatically change the position of creditors overnight – as JP Morgan did with Altice. Such situations warn how dynamic the financial environment is and how interests can collide. In Southeast Europe, where financial markets are shallower, business people can draw two conclusions from this case. First, the conservatism of local banks also has its advantages: it is less likely that someone “from the side” will appear and change the rules of the game in the middle of the match. The banking system here acts more predictably, even if it is less innovative. Second, this story is a reminder to companies to be cautious with borrowing – relying exclusively on banks means that in a crisis there may be no flexible solutions. Alternative sources of capital (such as funds or bond issuance) in the region are limited, so the best strategy is to prevent debt from falling into the “distressed” zone where maneuvering space is small. For policymakers and financial institutions, the JP Morgan–Altice case can be an incentive to develop capital markets and alternative forms of financing, but gradually and with clear rules. The ultimate message is that trust between creditor and debtor remains a key resource – whether on Wall Street or in the Balkans – because undermining that trust, as seen in the Altice example, leads to instability and a long-term increase in the cost of capital for all participants.

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"Standard Prva" LLC Bijeljina is a company registered in Bijeljina at the District Commercial Court in Bijeljina. Company’s activities are accountancy, repurchases of receivables, angel investing and other related services. Distressed debt is a part of the Group within which the company repurchases the receivables, which function and are not returned regularly.

Lawyer’s Office Stevanović is the leading lawyer’s office in the region with the seat in Bijeljina. The LO abbreviation represents Lawyer’s Office of Vesna Stevanović and Lawyer’s Office of Miloš Stevanović.

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