Big players leave as LBO market slows
Bankers who arranged financing for last year’s largest leveraged buyouts - TXU and First Data - are leaving their firms as the pace of takeovers slows, creating an opportunity for less established lenders to fund acquisitions.
By TNN |
NEW YORK: Bankers who arranged financing for last year���s largest leveraged buyouts ��� TXU and First Data ��� are leaving their firms as the pace of takeovers slows, creating an opportunity for less established lenders to fund acquisitions.
The departures include Morgan Stanley���s Ashok Nayyar, co-head of leveraged finance, and Deutsche Bank���s Michael Paasche, who ran global leveraged finance and plans to depart this year, said people with knowledge of their situations.
Banks such as London-based Barclays, which largely avoided losses on leveraged loans and subprime mortgages that have led to $383 billion of writedowns and credit losses, and private-equity firms like Blackstone Group���s GSO Capital Partners are financing deals as Wall Street reduces lending for buyouts to the lowest level this decade.
Companies have announced $118 billion of LBOs so far in 2008, about a third of last year���s record pace, data compiled by Bloomberg show.
���Firms are deciding they are going to get out of leveraged finance or not focus on it so much,��� said Jeanne Branthover, head of the financial services practice for Boyden Global Executive Search in New York. ���Leveraged finance is one area especially where foreign banks and private-equity firms are taking advantage of the market.���
Citigroup, which joined Deutsche Bank in financing the $25.6 billion buyout of First Data by New York-based Kohlberg Kravis Roberts & and funded the $32 billion LBO of Dallas-based TXU by KKR and TPG of Fort Worth, Texas, lost bankers, including Edward Crook, a managing director who worked on the First Data deal. Mickey Brennan, co-head of high-yield and loan sales, is retiring, said the people who declined to be identified.
Morgan Stanley���s Henry D���Alessandro, listed in a 2006 regulatory filing as head of US sponsors leveraged finance, and Steven Seltzer, who led syndication of high-yield bonds, are leaving after Michael Hart, who was in charge of leveraged lending, exited in January, according to bankers familiar with the departures. Calls to Crook and Paasche weren���t returned.
The departures include Morgan Stanley���s Ashok Nayyar, co-head of leveraged finance, and Deutsche Bank���s Michael Paasche, who ran global leveraged finance and plans to depart this year, said people with knowledge of their situations.
Banks such as London-based Barclays, which largely avoided losses on leveraged loans and subprime mortgages that have led to $383 billion of writedowns and credit losses, and private-equity firms like Blackstone Group���s GSO Capital Partners are financing deals as Wall Street reduces lending for buyouts to the lowest level this decade.
Companies have announced $118 billion of LBOs so far in 2008, about a third of last year���s record pace, data compiled by Bloomberg show.
���Firms are deciding they are going to get out of leveraged finance or not focus on it so much,��� said Jeanne Branthover, head of the financial services practice for Boyden Global Executive Search in New York. ���Leveraged finance is one area especially where foreign banks and private-equity firms are taking advantage of the market.���
Citigroup, which joined Deutsche Bank in financing the $25.6 billion buyout of First Data by New York-based Kohlberg Kravis Roberts & and funded the $32 billion LBO of Dallas-based TXU by KKR and TPG of Fort Worth, Texas, lost bankers, including Edward Crook, a managing director who worked on the First Data deal. Mickey Brennan, co-head of high-yield and loan sales, is retiring, said the people who declined to be identified.
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Morgan Stanley���s Henry D���Alessandro, listed in a 2006 regulatory filing as head of US sponsors leveraged finance, and Steven Seltzer, who led syndication of high-yield bonds, are leaving after Michael Hart, who was in charge of leveraged lending, exited in January, according to bankers familiar with the departures. Calls to Crook and Paasche weren���t returned.
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