Banks funding leveraged buyouts were rightly criticized in the early stages of the downturn for being wrong-footed by private equity sponsors, signing up to generous covenant waivers largely as a result of being unable to do anything else.
In recent months they have adopted a more robust approach, and more and more wiped-out equity holders are being forced to hand over the keys in debt-for-equity swaps.
West Bromwich Building Society, Styles and Wood, and Independent News and Media have agreed to such deals, along with the private equity owners of Gala Coral (Candover, Cinven and Permira), which are ceding control of the company to debtholders.
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