Little Risk, Big Rewards in Buyout Deals

As leveraged buyouts surge, hedge funds and other savvy investors are cleaning up with insurance policies aimed at protecting bondholders

Another day, another huge leveraged buyout. Student-loan company Sallie Mae became the latest company going private as it agreed Apr. 16 to a $25 billion acquisition by private equity firm J.C. Flowers (see BusinessWeek.com, 4/16/07, "A Premium Bid for Sallie Mae").

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