Bangkok--25 Feb--Standard & Poor's
"Are we approaching another boom period for leveraged buyouts?" asks a report published February 22, 2011 by Standard & Poor's Ratings Services, titled "Reshuffling The Debt: The Credit Implications Of the New Wave Of LBOs."
Private equity firms have been completing more of these deals since early 2010, bolstered by a modestly improving economy, healthier credit markets, increasing appetite for risk among bond investors, and low interest rates. These companies have large amounts of cash, possibly over $400 billion in total, and generally will need to invest much of it over the next few years. Therefore, Standard & Poor's Ratings Services expects this pickup in LBO activity to continue in 2011. The report discusses how the latest wave of LBOs compares to the mega deals done over the LBO boom period of 2005-2007, in terms of the deals' relative effects on credit quality.
The article is the latest in a series of reports titled "Reshuffling The Debt," which Standard & Poor's launched at the beginning of this year. The series rekindles the "Leveraging Of America" series of articles that the rating agency published in 2007, which commented on the large increases in nonfinancial corporate issuers' debt leverage shortly before the Great Recession began. "Reshuffling The Debt" investigates the leveraging trends of these entities now that we are in the wake of the recession.
The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Allyn Arden, CFA, New York (1) 212-438-7832