There has been much talk about how the credit squeeze and slowing economy has affected the public markets, but how has it affected private-equity firms? An article in the Hartford Business discusses how private equity firms are feeling the pain, especially as many private-equity owned companies have very high risk ratings and default risks. This appears to be more concerns of the past coming to fruition over leverage and credit quality more than breaking news, but it may come front and center before long.
Additionally, private equity-backed companies have large debt loads and when combined with decreased consumer spending, companies have less cash to service those loans. Leverage has enhanced returns, but it also augments the losses and decreases the returns to the private-equity firms that own the companies. This states that 25 of the 42 companies that ratings agency Standard & Poor's says have the lowest credit ratings are owned or controlled by private-equity firms, which gives them the highest chances for default.
It also appears that many private-equity firms overestimated the potential value and performance of the companies they bought, or at least that conditions exists now that credit is tight and the economy slower. If many industries and sectors are struggling in today's economy, it should come of no surprise that private-equity firms that purchased them with leverage are feeling the burn as well. A less-leveraged economy isn't leaving the billionaires entirely immune.
Economic times not leaving private equity credit ratings immune
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Reader Comments (Page 1 of 1)
3-25-2008 @ 1:02AM
Ernie said...
A World Press Release: Call Mr. Kenneth D. Lewis at 704-386-5689 and tell him you do not support Bank of America Corporations immoral acts of predatory lending to the disabled, elderly and the poor.
Released In; Spain, Italy, France, Germany, Turkey, India, E.U. Russia, Saudi Arabia, Oman, Egypt, African Nations, Latin American Government, People, Nations, Asia, and the President of the League of Arab States do not whore yourselves with Bank of America Corporation and Countrywide Home Loans.
This world call for help and protest, is a call to all World Governments, Banks, and media to help stop Bank Racketeering in the United States, Boycott Bank of America Corporation and their stock until they stop stealing my home and others with their, Predatory Lending practices, these acts by Bank of America Corporation is no less than Organized Crime, supported by World Governments and World banking practices. What do you say Wall Street, World Nations, World media and the UN? Will you all stand by and make yourselves apart of this?
Call Mr. Kenneth D. Lewis at 704-386-5689 and tell him you are not apart of this world of, any less than Organized Crime Supported by World Governments and World banking practices because President Bush will not protect “we the people.”
Does Bush support Racketeering by Mr. Kenneth D. Lewis
In addition, Bank of America Corporation and Countrywide home loans? Predatory lending to the disabled, elderly and the poor by Bank of America Corporation and their attorneys who find new loop holes to so call legally steal homes.
Together they commit racketeering under the Federal
Racketeering laws against the poor, elderly, disabled and stupid like me in order steal my home and have your support while they do it. Do you support these immoral acts?
Who will act, who will not, let America sees who cares.
In Jesus name, please do not let me lose my home to the
bank. I am a single father on disability trying to
keep our home. Will you President Bush the haves’ and
the have mores please have a heart and please help me
and my boys keep our home. Hear me President Bush in
Jesus name and turn not away from this email and my
plea. I know many cold people will keep this email
from you, I do pray your eyes and heart will read this
and you and the haves’ and have mores will help us.
What you all pay for one fund raising dinner can save
our home. May God Almighty Bless each and everyone who
reads, touches, or turns away from this email, in
Jesus Name. Bank of America in Orange, Virginia is my
bank that holds my loans. Is everyone a coward or will someone stand up for WE THE PEOPLE Bush sure as hell will not, he is in bed with the money people like Bank of America Corporation. God Help US all.
Ernie
3-25-2008 @ 1:05AM
Mr. Ernie Young said...
A World Press Release: Call Mr. Kenneth D. Lewis at 704-386-5689 and tell him you do not support Bank of America Corporations immoral acts of predatory lending to the disabled, elderly and the poor.
Released In; Spain, Italy, France, Germany, Turkey, India, E.U. Russia, Saudi Arabia, Oman, Egypt, African Nations, Latin American Government, People, Nations, Asia, and the President of the League of Arab States do not whore yourselves with Bank of America Corporation and Countrywide Home Loans.
This world call for help and protest, is a call to all World Governments, Banks, and media to help stop Bank Racketeering in the United States, Boycott Bank of America Corporation and their stock until they stop stealing my home and others with their, Predatory Lending practices, these acts by Bank of America Corporation is no less than Organized Crime, supported by World Governments and World banking practices. What do you say Wall Street, World Nations, World media and the UN? Will you all stand by and make yourselves apart of this?
Call Mr. Kenneth D. Lewis at 704-386-5689 and tell him you are not apart of this world of, any less than Organized Crime Supported by World Governments and World banking practices because President Bush will not protect “we the people.”
Does Bush support Racketeering by Mr. Kenneth D. Lewis
In addition, Bank of America Corporation and Countrywide home loans? Predatory lending to the disabled, elderly and the poor by Bank of America Corporation and their attorneys who find new loop holes to so call legally steal homes.
Together they commit racketeering under the Federal
Racketeering laws against the poor, elderly, disabled and stupid like me in order steal my home and have your support while they do it. Do you support these immoral acts?
Who will act, who will not, let America sees who cares.
In Jesus name, please do not let me lose my home to the
bank. I am a single father on disability trying to
keep our home. Will you President Bush the haves’ and
the have mores please have a heart and please help me
and my boys keep our home. Hear me President Bush in
Jesus name and turn not away from this email and my
plea. I know many cold people will keep this email
from you, I do pray your eyes and heart will read this
and you and the haves’ and have mores will help us.
What you all pay for one fund raising dinner can save
our home. May God Almighty Bless each and everyone who
reads, touches, or turns away from this email, in
Jesus Name. Bank of America in Orange, Virginia is my
bank that holds my loans. Is everyone a coward or will someone stand up for WE THE PEOPLE Bush sure as hell will not, he is in bed with the money people like Bank of America Corporation. God Help US all.
Ernie
3-25-2008 @ 12:42PM
Lou C said...
All these paper scammers should go to jail... They took away the american dream "owning a home".... Now people that recently bought are upside down (like a used car)... They owe more that the house is worth... A home should be the right of every hard working american... It is not a previlege... I grew up in the sixtys and always was able to afford a home... This administration, just looked the other way and gave these bankers a right to steal... Not they get bailed out with a gift of 211 billion...and the recent buyer gets shafted with nothing..just foreclosure.... We need honest people in government who care about what happens to people who are now at the mercy of corporations who out source their jobs to china , India etc... and create bank scams.. The system is BROKE with this kind of thinking.... Whats the government solution... Give married couple 1200 dollars... And thats borrowed money. We are doomed..