The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Can new funds sustain Europe’s LBO boom?

The European leveraged buy-out market appears to have found its feet again after a nervous first quarter. But banks remain cautious about lending to highly geared deals. Can institutional investors such as collateralized debt obligation funds fill the gap?


View graph.

Syndicated loan desks have made hundreds of millions of dollars from financing leveraged buy-outs (LBOs) over the past six years. But slowing growth in Europe and the US has made lenders nervous about the ability of LBO sponsors to service their loans. And the high-yield bond market - on which many LBOs rely for long-dated debt - is in turmoil following a series of defaults by telecom companies such as Winstar Communications.

The ability of private-equity investors to raise the debt they need to finance buy-outs is currently being tested by Merrill Lynch and CIBC who are arranging the £2.1 billion ($2.9 billion) financing of Yell, the yellow pages publishing company bought from British Telecom by Apax Partners and Hicks Muse Tate&Furst earlier this year.

In late July, Yell successfully raised £500 million in the high yield sterling and dollar markets.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree