Credit Rating for Debt in an LBO
What is the typical credit rating that private equity firms seek to have their debt rated? Is there any typical range?
Trending Content - Private Equity Forum
| +44 | Future of PE | 8 | 1h |
| +25 | Hardest time I have ever seen to be a GP | 3 | 3d |
| +20 | How to Get on Career Track / Stay Post ASO years | 6 | 1d |
| +19 | Weighing exit from LMM PC/PE | 4 | 1d |
| +18 | Healthcare PE | 7 | 8h |
| +15 | KKR comp for Principal | 20 | 8h |
| +11 | Reality of the move from LMM to MM | 2 | 6d |
| +9 | LMM/MM PE London | 5 | 1d |
| +9 | PE Behaviorals Feedback | 1 | 6d |
| +9 | MBA and Private Equity | 3 | 2d |
Career Resources
depends a lot on the tranche, seniority of the debt etc (senior secured vs subs), but i have never seen LBO debt rated investment grade so for a general guideline id say BB-CCC.
Concur with above post.
You want it to be rated as high as possible to get a lower spread against LIBOR/Prime but it'll most likely be junky. Lot of unrated stuff in the market as well (beware of those loans).
Most of our senior debt is shadow rated at BBB
BBB is investment grade. how do you have IG bond in an lbo transaction?
most lbo debt is rated Ba to B range even if its a bank deal
I would say most LBOs target at least B2/B for the CFR, occasionally you get lucky with a B1/B+ but that's usually an exceptionally good credit or the LBO has a conservative cap structure
Asperiores ut ducimus debitis rem dolores enim deleniti aliquid. Quod est impedit nihil cupiditate molestias consequatur dolorem possimus. Quos corporis explicabo in nesciunt ratione illum. Qui ipsum quaerat laboriosam asperiores quia recusandae. Rerum et provident amet quae exercitationem aperiam earum. Quidem reprehenderit recusandae sunt.
Modi ipsam modi autem fugiat unde voluptatem fugit. Eum in quia nihil provident. Ut odit repudiandae commodi omnis ipsam optio et a. Consequuntur aut eum sunt praesentium et in. Ut dolor explicabo sunt voluptatibus incidunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...