The tyranny of the credit markets may be nearing an end. For some while now, CEOs have been so nervous about the ratings and performance of their bonds that they have been rather like rabbits trapped in a car’s headlights… too scared to move.
By default the action has all been in the private equity space where no-one has any hang-ups about leverage and risk.
Is the pendulum now swinging back to the companies? Jean-Pierre Mustier, the boss of SG CIB, thinks so.
“Things have become unbalanced between the private equity world and that of listed companies,” he says. “With CEOs of listed companies concerned about ratings and the perceptions of debt investors, private equity firms have been able to take advantage.
“But with cash flow coming in, CEOs are becoming more strategic. The cursor is moving back to a situation whereby listed companies become more leveraged and start acquiring while private equity firms that have been too aggressive have to moderate their approach.”
Of course this also means that companies will start making mistakes. Watch this space.
