Reported about 12 hours ago
Private equity firms are increasingly borrowing to pay dividends to themselves and their investors, leading to a diminished equity stake in some of their biggest companies. As the M&A market remains stagnant, over 20 firms in the US and Europe have taken on debt to facilitate these payouts. Notable examples include Clarios International, which borrowed to issue a $4.5 billion dividend, and Trench Group, which raised €380 million for similar purposes. This trend, while attractive to lenders, raises concerns about the long-term financial health of the firms involved, especially as they increase leverage without committing additional equity.
Source: YAHOO