What is a Leveraged Buyout (LBO)?

What is a Leveraged Buyout (LBO)?

Tim Hall

30 years: Debt capital markets

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.

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.

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What is a Leveraged Buyout (LBO)?

20 mins 7 secs

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

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Summary
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Expert
Tim Hall

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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