Deutsche Bank and UBS Get Rare Lifeline on Buyout Debt for Cornerstone Deal
- Buyout firm CD&R agrees to take on $464 million of risky PIK
- Banks are marketing $1 billion of junk debt to help fund deal
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Private equity firm Clayton Dubilier & Rice is buying $464 million of the riskiest part of the debt for its own buyout of Cornerstone Building Brands Inc., limiting potential losses for the banks that agreed to fund the deal.
CD&R is purchasing the so-called “payment-in-kind” notes that a group of lenders led by Deutsche Bank AG and UBS Group AG had arranged for the deal, according to a filing this week. That decision will help reduce the amount of debt that the banks will need to sell to investors, according to people with knowledge of the matter.