JPMorgan Says PE Deals to Spur European Junk-Bond Craze: Q&A
- Private-equity cash of 300 billion euros waiting for deals
- Search for yield deepens pool of buyers across riskier debt
This article is for subscribers only.
JPMorgan Chase & Co. says the leveraged-debt markets in the EMEA region will get a boost this year from a spate of private-equity deals and investors’ clamor for higher yields.
Ben Thompson and Daniel Rudnicki Schlumberger, co-heads of the leveraged-finance team for Europe, Middle East and Africa, point to 300 billion euros ($364 billion) of “dry powder” in the hands of private-equity firms. Putting this to work for acquisitions including leveraged buyouts should lead to a rush of debt issuance. According to Fitch Ratings, PE sponsors typically use their own funds only for half of the purchase price and rely on leveraged loans or high-yield bonds to complete deals.