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Blackstone’s $5.5 Billion Hunt Shows New Reality of Buyout Finance

  • Commercial banks, direct lenders back Emerson carve-out
  • Investment banks bypassed after losses on buyout debt
Blackstone headquarters in New York.

Blackstone headquarters in New York.

Photographer: Angus Mordant/Bloomberg

Cobbling together $5.5 billion of financing for a leveraged buyout is trickier than ever given Wall Street’s reduced risk appetite. Just ask Blackstone Inc. 

When the buyout firm set its eyes on a unit of Emerson Electric Co., market conditions were bleak and getting bleaker by the day. Banks in the US and Europe were already staring at billions of dollars of losses on debt they had agreed to provide for acquisitions.