Blackstone on Current Conditions
Deep within Blackstone's recent 10Q, in the MD&A section, the company discusses the negative impact that the "considerable turbulence" in the housing and sub-prime mortgage markets has had on other fixed income markets.
"Deteriorating conditions in fixed income markets prevented lenders from syndicating senior loans and high yield debt."
Translation: when the music stopped the the banks got stuck holding our last deals.
"[T]he backlog resulting from pending private equity-led transactions reached record levels."
Translation: the banks can't get rid of the paper.
"This backlog resulted in lenders becoming less willing to fund new, large-sized acquisitions and as a consequence, the volume of new private equity acquisitions declined significantly in the quarter."
Translation: until the pipeline gets opened we can't get the big dogs closed.
"Recently announced private equity-led acquisitions have mostly been smaller in size, with less leverage and less favorable terms for the debt provided, including more onerous loan covenants."
Translation: looks like it's back to Plan A.
"The duration of current conditions in the credit markets is unknown."
No translation needed.
