Five Things You Need To Know About Debt: Revisited
About nine months ago, I posted a story called "Five Things You Need To Know About Debt Today," based on conversations I'd had with middle market lenders. I decided to revisit that list o' debt trends today to see what, if anything, has changed since November 2008. Here they are: 1. Sponsors are raising captive mezzanine funds to finance their own deals. With mezzanine so expensive, sponsors began thinking, "Why give away the upside to someone else? Why not have no-contingency financing at their fingertips with our own mezz fund?" Today: This is no longer the case. Firms like Insight Equity have succeeded in raising their own mezzanine pools, but the current outlook has tabled mezzanine capital as a priority in lieu of focusing on a much rarer commodity: senior debt. Besides, 2008 mezzanine funds raised a record-breaking $25 billion in 2008 while deal flow continued to shrink.
