As Blackstone (BX) walks away from the banks, others will follow
Posted by: admin in Engagements and Deals NewsFiled under: The Blackstone Group, Engagements
Blackstone (NYSE:BX) can’t be faulted for its creativity the way it can be for its share price. The firm states that it does not need the banks which have walked away from their commitments on several LBO deals wrecking them like ships on a reef. The huge private equity firm will go straight to hedge funds and mutual funds for deal loans.
It is an ingenious move which has the benefit of cutting out the banks which have charged high fees for their financing and cut and run from many of them. Other private equity firms are likely to follow, leaving the banks with LBO loans on their books and no new transactions which might bring in lending revenue.
Quoted by Bloomberg, the COO of Blackstone stated “We’re bypassing the banks. There’s still ultimately demand for this paper out there if you can go directly to the buyers.” Time will prove whether he is right.
For the entire story, go to 24/7 Wall St.
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