Leveraged buyout (LBO)

Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use of debt funds: bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an LBO through either the purchase of the debt ( i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an LBO fund that specializes in such investments. The New York Times Financial Glossary

Financial and business terms. 2012.

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  • Leveraged Buyout - LBO — The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of… …   Investment dictionary

  • Leveraged Buyout (LBO) — Bezeichnung einer speziellen Finanzierungskombination im Fall der Übernahme bzw. des Aufkaufs eines Unternehmens durch neue Eigentümer (auch Buyout genannt). Besonderes Merkmal ist, dass der (zuvor) breit gestreute Aktienbesitz auf eine relativ… …   Lexikon der Economics

  • leveraged buyout — leveraged buy·out / bī ˌau̇t/ n: the acquisition of a company usu. by members of its own management using debt to finance the purchase of equity with debt to be paid by future profits or sale of company assets Merriam Webster’s Dictionary of Law …   Law dictionary

  • leveraged buyout — (LBO) A transaction where a purchaser uses the assets of the corporation to be acquired (target) as collateral for the loan to buy the stock of the target. LBOs stand a significant risk of bankruptcy because, after the transaction, they have… …   Glossary of Bankruptcy

  • Leveraged Buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français

  • Leveraged buyout — Un financement d acquisition par emprunt, également désignée par le sigle LBO (pour l anglais leveraged buy out) consiste à racheter une société en ayant recours à de l endettement bancaire aussi appelé effet de levier. C est l entreprise… …   Wikipédia en Français

  • Leveraged buyout — A leveraged buyout (or LBO, or highly leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor acquires a controlling interest in a company s equity and where a significant percentage of the purchase price is… …   Wikipedia

  • leveraged buyout — Corporate acquisitions in which the acquiring company borrows most or all of the funds needed to finance the purchase. In a typical leveraged buyout, the buyer intends to repay the finance debt from funds gained from either the sale of assets… …   Financial and business terms

  • Leveraged buyout — El término inglés leveraged buyout, abreviado LBO, traducido compra apalancada o compra financiada por terceros y abreviado LBO describe la adquisición de una empresa con la ayuda de una gran parte de capital externo para alcanzar la suma… …   Wikipedia Español

  • leveraged buyout — /ˌli:vərɪdʒd baɪaυt/, leveraged takeover /ˌli:vərɪdʒd teɪkəυvə/ noun an act of buying all the shares in a company by borrowing money against the security of the shares to be bought. Abbreviation LBO ▪▪▪ ‘…the offer came after management had… …   Dictionary of banking and finance

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