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The Margin Whisper

Private Equity, and leveraged buyouts in particular, has managed to stay quite decidedly under the radar for much of the credit crisis. This despite being, by definition, highly dependent on consistent, if not entirely favorable, interest rate environments, regarded as an easy scape-goat for the debt woes of many a struggling public firm, and populated with an uber-wealthy and less than discrete senior manager corps.
Despite the opaque nature of the panic, they are, however, not immune.

Debt funds managed by Apollo Management and Blackstone Group's GSO Capital Partners recently fended off margin calls from banks as the prices of debt that they invested in were hammered, according to people familiar with the matter.
Apollo Credit Opportunities Fund LP received margin calls that were "modest" relative to the overall size of the fund, said a person with knowledge of the situation. In addition, the fund recently walked away from at least two agreed-to trades to purchase debt from Morgan Stanley and Royal Bank of Scotland because of the declining values of such securities, said three people familiar with the situation.

Apollo, GSO Debt Funds Have Faced Margin Call Issues [Deal Journal]