Sorry if this sounds stupid, but where do PE firms get debt financing for their LBOs? I'm very familiar with the LBO process but surely banks are not willing to lend at the amount of leverage demanded by financial sponsors? Is this where private credit comes in? I understand the equity portion comes from the LP but who is willing to commit the debt in the shell company?
Trending Content - Investment Banking Forum
Career Resources
https://www.spglobal.com/marketintelligence/en/pages/toc-primer/lcd-pri…
thanks for the link!
Senior debt from for example banks (RCF's, TLA/TLB's) and junior debt from private credit funds or mezzanine financing arms of banks.
I noticed the other user linking the leveraged loan primer - indeed a very interesting one.
If you want to extend your knowledge, and get to know a debt product that is structured on the fund level (rather than Holdco/Opco level), research Capital Calls or Fund Financing facilities. Highly interesting in my opinion, especially if you want to get to get to know all the details of private equity and it's relation to debt financing.
Thanks for the great explanation, will definitely look into it
Libero velit similique explicabo quaerat neque rerum et sint. Harum corporis rerum ipsa esse provident veritatis nam magni. Praesentium modi voluptatum ut libero pariatur eveniet qui. Laudantium ducimus repudiandae et aut ad. Nihil maiores facilis veritatis sint ea.
Ut unde voluptatum laborum quibusdam. Esse pariatur corporis sunt. Facere maxime voluptas officiis harum eius. Ad expedita porro quo accusamus eligendi aliquid ipsum ea. Id possimus est commodi rem optio.
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...