More Pain Ahead for Banks as Investors Balk at Risky Buyout Debt
- Buyer pushback leads to $3.9 billion debt deal being pulled
- Two LBOs with $14 billion of debt sit in near-term pipeline
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Wall Street banks trying to offload tens of billions of dollars in high-risk leveraged buyout debt are finding it increasingly tough as yields surge.
On Thursday, a group led by Bank of America Corp. and Barclays Plc scrapped a $3.9 billion debt sale for the buyout of an Apollo Global Management Inc.-backed telecom business called Brightspeed. The retreat follows an LBO fundraising for Citrix Systems Inc., which sold at rock-bottom prices last week, leaving lenders with about $600 million in losses.