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How the Growth of Private Credit is Impacting Private Equity

OfficeHours

In recent years, private credit has emerged as an important financing source for corporations of all kinds, especially for private equity-owned businesses with high financial leverage. The growth of private credit can be traced back to the Great Financial Crisis of 2008-2009. Private credit firms operate in a very different manner.

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Collateralized Debt Obligation (CDO)

Wall Street Mojo

What is a Collateralized Debt Obligation? Table of contents What is a Collateralized Debt Obligation? How does Collateralized Debt Obligation (CDO) Work? CDOs provide investors with a diversified portfolio of debt instruments across different risk levels. read more , etc.

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M&A Blog #08 – debt (Part III – lender’s view, debt rating, liquidity, and distressed company)

Francine Way

How many of us know people who lost their homes in the 2008 mortgage crisis? We have spent the last few posts looking at debt and it can be useful to a corporate borrower; as well as negative impacts debt can pose to the capital structure. There are many different kinds of debt providers: banks, bondholders, hedge funds, etc.

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Growth Equity: The Child Prodigy of Private Equity and Venture Capital, or an Artifact of Easy Money?

Mergers and Inquisitions

Over the past few decades, growth equity (GE) has gone from an afterthought to a major asset class for huge investment firms. Some argue that GE offers the best of both worlds: the opportunity to fund innovation and growth – as in venture capital – plus the ability to limit downside risk and invest in proven companies – as in private equity.

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M&A Blog #07 – debt (Part II – management considerations, debt alternatives, and acquisitions purse / war chest)

Francine Way

If the 2008 mortgage crisis taught us anything, it is not to get ourselves into situations where our homes can be taken away by the banks. That debt should be used prudently, taking into account future financial shocks that require financing flexibility. We will discuss the three most common one in this post: 1.

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M&A Blog #06 – debt (Part I – role and trade-offs, categories and key characteristics)

Francine Way

To be explicitly clear, I am recommending the use of the following ranked capital sources when paying for an acquisition: cash (from the balance sheet), debt (at a reasonable level), and equity. Similarly, not all corporate debt instruments are created equal and each comes with pros and cons.

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Pandemic-Related Deal Litigation Highlights Buyer Leverage in Transactions Requiring Debt Financing

Cooley M&A

Since that post, the Delaware Chancery Court has had the opportunity to consider some preliminary issues relating to certain of those jeopardized transactions involving private equity-backed buyers.

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