Luxembourg

Details

  • Industry: Private Equity
  • Type: Press release
  • Date: 2/10/2010

State of the buy-out industry in the great credit crisis 

Refinancing of leveraged buy-outs and governments’ stance as de facto holders of leveraged buy-out debt raise near term concerns.

Statistics from Dealogic indicate that about $ 1 Trillion of leveraged buy-out debt at portfolio companies is due for refinancing in the coming years. The bulk of the debt that will become due for refinancing was originally negotiated on very favorable terms with low credit spreads relative to risk free rates. Frequently, banks were competing among themselves to provide debt financing to leveraged buy-outs sponsored by the most established names in the industry. There were regional differences in lending patterns between the US markets where “covenant-lite” loans offering lower protection to the lender were more prevalent relative to the lending practices observed in Europe.

 

Sign up now

Subscribe to selected content and receive email alerts when new content is available for viewing on this site.

 

Already a member? Login

 

Not a member? Register