Leveraged buyouts: risky financial arrangements or growth opportunities for companies?

Bulletin No. 260, article 4. The leveraged buyout (LBO) market has grown significantly in recent years, driven by the historically low cost of capital. However, the recent rise in interest rates could undermine the quality of existing LBOs. These complex financial arrangements are based on maximising leverage by financing business acquisitions with high levels of debt. LBOs have controversial effects on the performance and financial health of businesses. …