What is a Leveraged Buyout (LBO)?
Leveraged buyouts, or 'LBOs', can at times provide investors with high returns despite only risking little relative capital. In this video, Tim details the role of leverage within the process as well as describing appropriate capital structures.
Overview
Perpetual bonds are a hybrid debt instrument that possess similarities with bonds and equity. The key feature of a perpetual bond is that there is no maturity date. The benefit of issuing a perpetual bond for a company is that it lowers their debt leverage. For an investor, it often offers a higher yield than other forms of debt on the market.
Key learning objectives:
Define a leveraged buyout
Understand how leverage can maximise returns
Know the types of debt used in an LBO and the importance of capital structure
Summary
Expert
Tim Hall
Tim has nearly 30 years of experience in the international capital markets at major global institutions and has worked both on the buy-side and the sell-side. He has worked with numerous companies, banks and governments in developed and emerging markets on investment grade and high yield bond issues, from straight-forward to very complex acquisition/leveraged financings. Tim has also been on the board of a UK “challenger bank.” Tim has an MBA from the Wharton School, and is a CFA.
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