Leveraged buyouts: Why LBO risk is over hyped

McAdie: “LBO and event risk is real but it’s been hyped up a lot”

The number of companies that could soon be subject to a leveraged buyout may have been overestimated, prompting a mistaken re-pricing of risk in many names since Easter. “LBO, and event risk, is real, but it’s been hyped up a lot and needs to be looked at name by name,” says Robert McAdie, global head of credit strategy at Barclays Capital. “There is a lot of over-estimated risk being priced into some sectors.”