In UK the private equity are playing a major role in lending loans to firm who wants to make a buyout through the means of leverage ( also known as Leveraged buyout or LBO.) big industrist have announced and raised huge cash to be given to companies seeking LBO funds. But to the contrary the firms in UK are not in a mood to make new acquisitions and build assets. The latest reports published by standards and poor’s leverage commentary and data, it is shown that the loans raised is much higher than loans being applied for.
The fund managers are finding it tough to find firms seeking loan. They have started new measures to supply loans in the economic market. The interest rate offered on such loans is just 5% which is same as the interbank offer rate on a seven year payment terms. There is a surplus of fund available with the leveraging companies to drive in the economy but the fund seekers are very limited. At the moment it’s seen as the investments have been put on hold as an option by the country. The news is following that Apax has delayed its payment of 50 million pounds as the dividend, until the Trader Media’s leverage falls to less than five times.
The data from Cambridge, Massachusetts as per EPFR Global show that the Inflows of the funds specifically to loans and floating-rate debt has risen to $8.5 billion in this financial year, compared to $1.7 billion for the same duration in preceding year. Companies like Advent International Corp., EQT Partners AB, Bain Capital and few more has reduced interest on LBO loans.
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