"Debt buy-backs" force change to bank documentation

Author: Nicholas Pettifer | Published: 7 May 2008

The trend of private equity houses buying back their own debt has worried banks into changing their lending documentation.

The debt issued for previous buy-outs is trading at a discount, making it an attractive investment for private equity. But the banks are worried because if it is bought up the private equity houses will own debt and equity in the same company – giving them greater control.

Danish telecommunications company TDC, which is owned by a...