Filed under: Private equity industry
The American consumer is not the only part of the US economy that’s holding off on spending. So are institutional bond investors.
Based on a report from Bloomberg, it looks like Wall Street’s premier investment banks — including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and JPMorgan Chase (NYSE: JPM) — are slashing prices on their buyout debt backlog. In fact, some of the discounts are as much as 10% of the face value. Given that Wall Street is going to report horrendous financial results, it makes sense to deal with the problems now, right?
Interestingly enough, Wall Street had some help from failed deals, such as with SLM (NYSE: SLM). This trend has wiped out $51 billion in obligations.
Yet, there is still much to finance, such as Clear Channel, Harrah’s, BCE and Alltel. So, we might also see some post-Christmas buyout bond slashing, as well.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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