What type of concessions were private equity firms able to get from investment banks during 2006 and the first half of 2007 that normally would not be possible?
Answer:
From 2006 to mid 2007 a vacant space was created in the private equity market, with the debt and income increasing above the past income. A few deals which came to an end in this era will experience difficulty and will generate lower income. Through mid 2007 during credit crisis many deals faced major troubles. Investment banks could not organize LBO debt, which was more than $390 billion. Many deals were taken back and other was negotiated. As a result arrangement of private equity dealings changed.
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