Speaking of The Economist: They are reporting in this week’s issue about private equity issues that are not going, such as US Foodservice’s cancellation of a bond flotation, and the unwillingness of certain banks to extend bridge financing due to worries about downside exposure.
The WSJ has been reporting as of late on the amount of debt service necessary to make some of these deals happen, and the parallels to the late ’80’s LBO frenzy and the amount of subordinated debt that generated.
JWM: There are reports that United Capital is having major problems with their sub-prime lending unit, and that Fannie Mae might ride to the rescue on that one. Speaking of Fannie Mae, there are rumblings about Fannie’s exposure to the sub-prime mess due to their holdings in sub-AAA rated paper. So, the mess continues to spread.
