Private Equity Check Please

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The auto-financing ATM for PE deals is out of order, and 46 LBO financing packages have been taken off the market in the last month and a half. The total bill amounts to $60 billion and averages about $5 billion per bank, or $10 billion for the larger financers like Citi and JPMorgan. Deal Journal estimates that total losses will probably fall within 10 cents on the dollar and that a $1 billion dollar hit would be a fraction of the fees banks gobbled up from the PE boom.
One minor problem with the rosy “acceptable loss” outlook is that the $60 billion may be the tip of the iceberg. There’s still $340 billion worth of PE financing that hasn’t gone to market. Much of that sum starts to hit the market in September after an August lull, which makes for an especially tense period of dog days.
The $60 Billion High Yield Appetizer [Deal Journal]
Credit Chill Freezes Leveraged Deals [Wall Street Journal]

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