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 390,564.78 1474 8.99%
2 JPMorgan 358,442.23 1626 8.25%
3 Bank of America Merrill Lynch 344,395.33 1215 7.93%
4 Goldman Sachs 257,185.44 862 5.92%
5 Barclays 252,851.12 991 5.82%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 36,645.46 176 6.31%
2 Deutsche Bank 36,386.11 128 6.26%
3 Bank of America Merrill Lynch 30,712.91 97 5.28%
4 BNP Paribas 30,600.75 184 5.27%
5 Barclays 30,394.96 86 5.23%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 21,398.51 94 8.80%
2 Morgan Stanley 17,329.08 90 7.13%
3 Citi 16,974.50 104 6.98%
4 UBS 16,643.68 66 6.85%
5 Goldman Sachs 16,179.39 87 6.66%