...Lower Sponsor Confidence: Fitch Ratings believes that the current economic environment in Europe has reduced financial sponsors' confidence in the ability of speculative-grade borrowers to sustain higher leverage in secondary buy-outs (SBOs) and dividend-recapitalisations compared with the period from 2005 to 2007. Today's credit market conditions again appear buoyant, but weak aggregate demand conditions in Europe translate into lower volumes, less pricing power and weaker top-line and margin performance for many corporates. More Conservative Recycled Deals: These differing operating environment dynamics have led sponsors to assume generally more conservative revenue growth, profit margin expansion and deleveraging profiles in SBOs and dividend-recapitalisations in the period 2013¡2015 than in such transactions completed before the financial crisis of 2008. Sponsors Remain Sellers: Private-equity sponsors are likely to continue embracing high exit multiples for their portfolio companies....
