New York Times (March 1)
Four decades of private equity “financial bonanza” may be coming to an end after Judge Jed Rakoff ruled that “the former directors and officers of Jones Group could be held liable for approving the [highly leveraged] sale of the company, since it later went bankrupt.” Going forward, “officers and directors had better think twice before agreeing to sell a company to a buyout firm. What had for decades been considered a virtue — selling a company for a market-clearing price to the benefit of existing shareholders — might have become a vice.”
Tags: Bankrupt, Buyout firm, Directors, Financial bonanza, Jones Group, Leveraged, Liable, Market clearing, Officers, Private equity, Rakoff, Sell, Shareholders, Vice, Virtue
Investment Week (March 12)
“BBB corporate bonds, the lowest investment grade rating band in which a company’s debt rating can reside, have now grown to make up more than half of the entire global investment grade (IG) market.” When the next downturn strikes,”there could be a cascade of ‘fallen angels’, companies that are downgraded from IG to high yield (HY), swamping the smaller HY market and causing problems for investors as liquidity dries up and imperfect market clearing mechanisms struggle to cope.”
Tags: BBB, Bonds, Debt, Downgrade, Downturn, Fallen angels, High yield, Investment grade, Liquidity, Market clearing, Strikes
