A numbers game

Martin Fridson


The Wall Street Journal recently reported that leveraged buyouts (LBOs) are becoming more leveraged. In the second quarter of 2005, according to statistics compiled by research firm CreditSights, LBOs had average multiples of debt to earnings before interest, taxes, depreciation and amortisation of 5.16 times. The comparable figure for the second quarter of 2003 was 3.85 times.

If institutional investors' appetite for high-yielding instruments continues, we can look forward to additiona

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