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What Makes a Good Leveraged Buyout (LBO) Candidate?

There is a routine answer to this question - a company with large stable free cash flows and low levels of debt. This is usually followed by: How Does an LBO Create Value for Financial Sponsors? Debt paydown, EBITDA growth and multiple expansion. Debt paydown/repayment is easy to understand - if an LBO

What is a Leveraged Buyout? Introduction to LBOs

When someone brings up an LBO, people immediately associate this with investment banking and private equity. LBOs are associated with very advanced financial modelling and students sometimes get scared when the concept comes up. In reality, while investment bankers do run LBO models on a very regular basis, it is one of

Introduction to High Yield Bonds

What Are High Yield Bonds? What separates investment grade and sub-investment grade? The answer is a designated credit rating by the mainstream credit rating agencies - Moody's, S&P and Fitch. Moody's is widely accepted to be the gold standard for rating agencies. The rating agencies will assign scores for corporates based on

Differences Between Leveraged Finance and DCM

What is Leveraged Finance? Leveraged finance ("LevFin") is in its official capacity a debt capital markets (DCM) group. However, when investment bankers refer to DCM they are almost always referring to investment grade debt capital markets. Levfin is in practice treated as a separate product group. Functionally, the two roles end up

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