Private equity involved in 62% of corporate defaults: S&P

SAN FRANCISCO (MarketWatch) — Financial sponsors’ investments in higher-risk companies have come back to bite them, as more than half of the corporations that defaulted on their bonds had private equity investments, Standard & Poor’s said in a note made public Thursday. Through Nov. 17, 86 entities had defaulted on their debt this year, affecting $285 billion. Of those defaulters, 53 were involved in transactions with private equity. “Sponsors inherently target troubled entities that could be had at an attractive price, turned around and sold for profit,” noted Diane Vazza, head of fixed income research at the ratings agency. “We expect private equity exposure to the defaulting companies in the coming months to remain elevated,” she said. Fremont General , Ziff Davis Media and Six Flags [s:six] are some of the companies with private equity stakes that defaulted on their debt this year.
Market Pulse Stories are Rapid-fire, short news bursts […]

Original post by Forextvblog

This entry was posted on Thursday, November 20th, 2008 at 9:46 am and is filed under Daily Forex Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.