Reported 8 months ago
Private equity investors are increasingly resorting to dividend recaps, where lower-rated companies raise debt to pay investors, as a means of meeting their demands for payouts amid a lack of traditional exit strategies due to a slowdown in mergers and acquisitions and initial public offerings. Despite the risks associated with leveraging companies further, private equity firms continue to turn to dividend recaps due to the high demand for credit. This trend is driven by the desire to provide quick returns to investors and the challenging market conditions, with some of the latest deals including Blackstone refinancing Park Place Technologies' debt and Centerbridge Partners launching a loan sale for KIK Custom Products for a dividend payout.
Source: YAHOO