The CLO kind of got off lightly in Fed governor Jeremy Stein’s “Overheating in credit markets” speech.
Makes sense, given what Stein was mostly talking about — places in the market where the yield chase could be relying on assets that in turn rely on short-term funding. In other words, leverage that turns “overheating” into a supernova. Read more
FT Alphaville noted last week that Citi analysts were predicting a return to the heady pre-crisis levels of leveraged buy-outs.
But, they argued, this time is kind of different: there will be fewer “mega-deals” (>$7bn) and the CLO business will be “a shadow of its former self.” Read more
Lenders to Linpac are planning to break up and sell Europe’s biggest food packaging group as part of a growing push by banks to flip assets back into the market after taking them over via debt restructurings. UK-based Linpac was taken over by lenders, including Deutsche Bank and Lloyds, late last year, wiping out Montagu Private Equity, which bought Linpac for £860m in 2003. Meanwhile, Lloyds also plans to sell UK-based Covenant Healthcare to its bigger rival General Healthcare Group, after taking it over from buy-out firm Cognetas.