- Nownoleveragedinvestmentfirmappearstobeanystrongerthantheweakestlinkinitsdebtstructure.Forinstance,highlyleveragedinvestmentBankslendmorewhencreditiseasyandpullbackfasterinthecrash.ButChina'sfinancialsystemisnotwithoutproblems.ItisonlybecausetheChin...
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- Hedgefundshaveactivelyprovidedcreditvialeveragedloans.Highlyleveragedfundssinkquicklyinsuchchoppymarkets.Afterthat,anESBcanbecreatedandleveragedtoprovideenhancedservicecapabilities.Sodon'thopefora$100billionleveragedbuy-out—unlessyou'reavulture.Th...
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- Anothertroublespotisthedebtfinancingprovidedlastyeartofacilitateleveragedbuyoutsofreal-estateconcerns.Inourview,therapidincreaseofstockbuy-backsandleveragedbuyoutsisasymptom,notacause,ofsomethingmorefundamental.Inthe1980,privateequitycompaniesbecamek...
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- Amarketvehiclefortransferringriskawayfromthesehighlyleveragedloanoriginatorscanbecriticalforeconomicstability,especiallyinaglobalenvironment.Hedgefundshaveactivelyprovidedcreditvialeveragedloans.Oneindicationisthediscountedpriceatwhichleveragedloansa...
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