Apr
14
Buyout Firms Feel Pinch From Lending Crackdown
ByRegulatory guidance that seeks to limit the use of borrowed money in takeovers has hampered the business of debt-laden acquisitions
An effort by regulators to deter banks from financing takeovers with high levels of debt has dealt a blow to the private-equity industry.
After resisting at first, banks have lately been falling in line with guidance regulators set in 2013, which sought to limit how much debt banks could extend for corporate takeovers. The shift is now stinging private-equity firms, whose bread-and-butter business is debt-laden buyouts.
U.S. buyouts this year have fallen. Firms spent $17.14 billion buying U.S. companies as of Wednesday, the lowest dollar volume at this point in the year since 2012 and representing the fewest deals since 2010, according to data provider Dealogic…
