PE Firms Flood Junk Debt Market to Pay Themselves
View original at finance.yahoo.comPE Firms Flood Junk Debt Market to Pay Themselves (Bloomberg) -- Private equity firms, struggling to find buyers for their investments, are turning to an old playbook like never before…
What we drew from this source
The claims Via News extracted from this document. We point to the source; we don't replace it.
The problem is the deals aren't performing. When they don't perform, even if I want to sell mine, I'm not going to sell it to the other PE guy that knows he has his own deals that aren't performing. The easiest thing to do is to do a recapitalization and sell it to a less credit discriminate investor, which is a CLO.
80% confidenceAt the current rate of fund distributions, it would take about nine years for customers to collect their money from the more than 12,000 companies held by US buyout funds
80% confidenceThere were more than 18,000 private capital funds seeking $3.3 trillion in fundraising
80% confidenceThe reason that sponsors are doing dividend recaps is realistically because they have struggled to monetize their investments. The IPO market has started to thaw but is not really providing an exit. The LPs are not getting their money back.
80% confidenceThe Darktrace dividend loan represents an aggressive financial policy with high leverage
80% confidenceAll the stars are aligned for dividend recaps; rates are coming down, spreads are tight, the market is open — yet the IPO market and M&A are still subdued. Investors want distributions, and dividend recaps can buy PE firms more time to wait for a better environment for exits.
80% confidenceBitcoin could reach as high as $200,000 by January's end
80% confidence