LBO, Equity-Friendly Risks Rise

The continued weak performance of the equity markets could hit the high-grade credit markets, in the form of credit-damaging leveraged buy-outs, dividends, share buybacks and other shareholder-friendly plans, say bond strategists.

  • 13 May 2005
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The continued weak performance of the equity markets could hit the high-grade credit markets, in the form of credit-damaging leveraged buy-outs, dividends, share buybacks and other shareholder-friendly plans, say bond strategists. And Kirk Kerkorian's recent bid for General Motors shares, for example, speaks to the amount of private equity money on the sidelines waiting to be put to work, noted buy- and sell-siders.

John Tierney, high-grade credit strategist at Deutsche Bank, said LBO risk is spreading from cable and telecom to other sectors, highlighting metals and other commodity-based industries as vulnerable areas. He declined to discuss specific credits at risk. Another strategist remarked smaller-sized firms with lagging stock performance, management issues and the ability to operate following a downgrade are vulnerable to an LBO. "Equity market performance has not been something to rave about and anyone with the potential to do something about that will," he stated.

And investors agree. "If there's a management team shareholders are pissed at, stay away from them," one portfolio manager recommended.

  • 13 May 2005

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 282,641.19 1046 9.01%
2 JPMorgan 257,395.97 1177 8.20%
3 Bank of America Merrill Lynch 251,828.32 868 8.02%
4 Goldman Sachs 192,523.13 618 6.13%
5 Barclays 184,453.95 705 5.88%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 28,971.26 117 7.01%
2 Deutsche Bank 27,415.35 91 6.63%
3 Bank of America Merrill Lynch 25,509.39 71 6.17%
4 BNP Paribas 21,729.97 121 5.26%
5 Credit Agricole CIB 19,966.59 113 4.83%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 13,671.74 61 7.87%
2 Citi 12,076.06 76 6.95%
3 Morgan Stanley 11,899.85 66 6.85%
4 UBS 11,800.30 47 6.80%
5 Goldman Sachs 11,111.93 58 6.40%