Wednesday, April 12, 2006

I.M.F. Sounds Off on Buyout Boom

The leveraged buyout business is booming, and that has raised concerns at the International Monetary Fund about the effects on the corporate credit picture worldwide. In its semiannual assessment of risks to global financial stability, the IMF points to private equity firms loading companies with debt in order to pay out special dividends to their investors. This can significantly weaken the credit ratings of the target companies, the head of the IMF’s international capital markets department said, according to the Times of London.

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