Debt risk rising in private equity
Date: Tuesday 1st May, 2007
Author: Chris Laughton
Profile: Chris Laughton
The credit that is fuelling leveraged buyouts and other private equity deals may become tomorrow's problem, according to a recent post by Bob Eisenbach
. The US Bankruptcy lawyer draws on articles in the Financial Times
and the Guardian
(courtesy of a New York Times blog
Sub-prime mortgage lenders are suffering in the US just now and commentators are drawing parallels to suggest that lax credit standards in the corporate arena could magnify default rates in an economic downturn. The problems will be exacerbated by investors who have chased returns and moved towards more illiquid hedge and buyout funds.
Do you agree? Are you seeing rising default rates? Send us your comments.
Keywords: 'credit standards' 'default rates' 'leveraged buyouts' 'private equity'
Please note that the opinions expressed in this blog represent the views of the author and not the views of Mercer & Hole.