Leveraged buyout

• Abbreviated LBO. An acquisition technique involving the use of a large amount of debt to purchase a firm; an example of a financial merger.

• Abbreviated 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.

 Embedded terms in definition
Financial merger
Junk bonds
Junk bond
 Related Terms
Highly leveraged transaction
Leveraged beta
Leveraged equity
Leveraged lease
Leveraged portfolio
Leveraged recapitalization
Leveraged required return
Management buyout

<< Leveraged beta Leveraged equity >>

Ways to Cope Financially During and After a Big Change: Here are suggestions for staying focused and avoiding costly decisions during changing times. More...

We may think there is willpower involved, but more likely… change is due to want power. Wanting the new addiction more than the old one. Wanting the new me in preference to the person I am now. – George Sheehan


Copyright ©2009-2019 GVC. All rights reserved.