Default Update: Percentage of PE-backed Bankruptcies Falls, S&P Reports
Even though global loan defaults have quadrupled in 2008, the percentage of defaults with private equity fingerprints on them has decreased in the last quarter, according to a recent Standard & Poor's report. Titled "Private Equity Swirling In The Eye Of The Storm," the report states that 53 of the 86 loan defaulters this year have been involved with private equity firms, which equals 61%. Compare that with the ratings agency's September report, which traced 70% of the 55 defaults back to private equity firms. I'm not sure what the drop means, other than an increase in companies with non-LBO leverage are having a tough time servicing their debt. In general, I predict a spike in defaults in 2009 but don't expect the percentage of private equity involvement
