PE Firms Tap Europe’s Junk Market for Dividends as Exits Stall

Private equity firms are once again tapping the European junk debt market to pay themselves dividends as market volatility fueled by the Iran war and AI anxiety limits their ability to cash out.

Brookfield-backed REIT Befimmo, One Equity Partners’ Lutech SpA and Cooper Consumer Health, — owned by a consortium of firms including CVC — are among a number of junk-rated borrowers that have recently issued so-called dividend recapitalizations, with more expected in the near future, according to people familiar with the matter.