PE Shops Press for Better Junk Terms

Friedlander, Josh
June 2005
Investment Dealers' Digest;6/6/2005, Vol. 72 Issue 22, p10
Trade Publication
The article focuses on trends in private equity firms. Some financial sponsors are now pushing for more flexibility in the covenants--or the restrictions around a company's capital structure--that govern their high-yield borrowings. Private equity firms would like to see covenant restrictions eased in part out of a desire to securitize pieces of the companies they have purchased. More recently, private equity firms have expressed interest in securitizing future revenue streams, a financing that would tend to work best for companies that have highly predictable earnings, such as music or film companies or fast-food franchisers.


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