Hi all,
can someone please explain to me the relationship between high yield bond markets and LBOs as high yield bond markets can somehow finance LBOs?
thanks.
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What isn't there to get? LBO = Leveraged Buyout = Using a lot of debt to buy a company. Some of that debt can come from a high-yield bond offering. Frequently, though, a HY offering is also used to recap the sponsor.
lbo targets are usually incurring a large amount of debt as part of the transaction, which depresses their credit rating below ig. as a result if they issue bonds to finance the deal it is done in the hy market
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