If private equity leveraged buyouts sink the companies that are purchased, why do such loans keep getting made?
A short guide to how private equity works: When the shareholders of a company want to sell, they negotiate a price with a buyer. Afterwards, the buyer does whatever they want with the company, within legal bounds. When money is cheap, this happens a lot. The end.https://twitter.com/ExponentsMag/status/1194634885832404992 …
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The loan issuers make sure they get paid. Period. There are a bunch of financing methods but many come down to debt having liquidation preference over equity so if company does sink, banks get paid first.
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