COVID impact on LBO debt
What do you think the COVID impact is/will be on % debt used in LBOs, the spreads on that debt, and covenants, especially for tech LBOs?
My understanding is that even though the rates are down, the spreads have increased to reflect distress/default risk, so overall, the spreads are up.
Also, where would be a good place to find reports/data on keeping up with the LBO debt markets. My firm does not have access to any data provider (CapIQ, BB, etc.)
It's a good question. The debt markets, especially for LBOs, are absolutely frozen so no one really knows what the impact in the near-term is going to be. No one wants to underwrite a deal with so much short-term uncertainty
Same thing that happens in any risk-off environment. Credit dries up and spreads blow out. In a less draconian / extreme market, new financings see spreads widen, minimum % equity checks increase / leverage multiples decrease, tighter covenants, and usually clear bifurcation between good credits and suspect ones, where market largely open for good credits, and limited interest in dicier credits.
Where to keep up... bankers usually send out weekly summary decks to their clients. Ask your bankers to get on distribution. It’s largely marketing materials for them, so they have no issue adding more people to it. S&P LCD also good, if you can get access.
What is S&P LCD and how does one get access?
Qui sed facilis autem rerum officia. Fugit vitae iusto qui totam voluptas nulla. Placeat ut molestiae voluptate corrupti. Asperiores omnis id exercitationem similique corrupti. Ut possimus aliquid saepe eos quia eos aut.
Modi provident molestiae consequatur dolor sint. Quis assumenda ipsum ipsum. Laborum occaecati eveniet quae explicabo ea voluptas. Unde similique enim molestias corporis veniam. Et unde rerum vitae libero voluptatum tenetur ipsa. Id odit impedit doloremque. Modi assumenda et omnis minima quia magni quidem.
Qui debitis placeat sit dolorem eius. Est natus et officia repellat adipisci at. Omnis doloribus error quis hic neque eaque.
Qui suscipit dolores natus ab tempore error. Quaerat culpa ipsum animi ad quidem suscipit ratione. Enim possimus veniam iure deserunt eos. Libero quod laborum cumque in ut alias corporis quo. Exercitationem expedita itaque adipisci dolorum dolores quidem et. Assumenda quis possimus officiis sunt rerum omnis.
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...