Meaning LEVERAGED BUYOUT (LBO): A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an L.B.O. through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an L.B.O. fund that specializes in such investments
More terms such as Leveraged buyout (LBO) in Dictionary L.
- Definition Loan-To-Value Ratio (LTV):
- Examples The ratio of money borrowed on a property to the property's fair market value leveraged buyout (lbo) definition.
- Definition Long-Term Debt-To-Equity Ratio:
- Examples A capitalization ratio comparing long-term debt to shareholders' equity leveraged buyout (lbo) explain.
- Definition Leverage Ratios:
- Examples relative value of stockholders, capitalization, and creditors obligations, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm (debt plus leveraged buyout (lbo) what is.
- Definition Limitation On Asset Dispositions:
- Examples A bond covenant that restricts in some way a firm's ability to sell major assets leveraged buyout (lbo) meaning.
- Definition Leveraged Investment Company:
- Examples An investment company or mutual fund entitled to borrow capital for its operations. Also, an investment company that issues both income shares and capital shares leveraged buyout (lbo) abbreviation.
