Comment by joegibbs
2 years ago
But why would anyone lend to a company which has been bought out by a PE firm then? Wouldn't banks turn around and say "hold on, I know this old trick, you're going to take loads of my money and then give it to yourself and default, and I get nothing"?
The PE firms use the debt from their purchase of the business to load them up. They don’t even put their own money into it.