Credit Trends: Born This Way: Acceptance Grows For New Speculative-Grade Companies Through 30 Years Of LBOs, Bank Loans, And Falling Interest Rates
5467 words —
Published Jan 12, 2012
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As high-yield debt has gained acceptance, LBOs have become more prominent since the early 1980s. Bryan Burrough and John Helyar, in their book "Barbarians At the Gate," immortalized this kind of debt-fueled, private takeover of a public company. The book recounts the $31 billion takeover battle for RJR Nabisco that closed in 1989. As the "leveraged" in LBO implies, these deals include high levels of debt and credit risk that seldom fit an investment-grade credit profile. Since the 1980s, LBOs have gone through cycles of popularity, with buyouts growing in size and scope each cycle. The Nabisco takeover remained the largest LBO for nearly two decades until the resurgence of large takeovers in 2006-2007 when LBOs such as HCA Inc.
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RESEARCH Ratings Definitions PDF Credit Trends: Born This Way: Acceptance Grows For New Speculative-Grade Companies Through 30 Years Of LBOs, Bank Loans, And Falling Interest Rates Publication date: 12-Jan-2012 Global Fixed Income...
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Global Issuers, Public Finance, Structured Finance
S&P Credit Research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.