Private-Equity Firms’ Exit Tactics Risk Curbing Fees for Banks
- Bain, Cinven and Carlyle add so-called portability to deals
- The mechanism lets a buyer lock a firm’s current debt in place
Techem's new owners are private equity firm TPG and Singapore sovereign wealth fund GIC.
Source: TechemThis article is for subscribers only.
Banks risk missing out on lucrative underwriting fees on two of the biggest buyout deals in the market as private-equity firms tweak debt terms mid-way through the sales process.
The practice of introducing portability into deals locks a company’s old borrowing in place and avoids the situation where a sale triggers change-of-control provisions that require a buyer to immediately refinance or pay off debt.