The refinancing hurdle for European leveraged buyouts (LBOs) over the next four or five years looks daunting. Credit Suisse calculates a peak in the maturity curve in 2016, with €245bn outstanding between now and then. This refinancing must be managed during a wave of structural changes that are constraining the supply of new leveraged finance – perhaps permanently.
High-yield bonds have provided one alternative, curbing dependence on banks. They now account for as much as 44% of European leveraged finance issuance, compared with 14% in 2006. But high-yield bonds do not suit every borrower. Investors are very ratings-sensitive and liquidity can dry up quickly.
Read the full story here: The party's over: how straitened times are affecting Europe's private equity players
