Chrysler in serious financial crunch: report | Reuters
Is this a sign of things to come for most leveraged buyouts? My guess is yes.
the slowing economy and you have a Private equity firms have taken so many companies private over the last few years and loaded them with debt. However the debt used in buyout was never intended for business operations but to buy out shareholders and pay transaction fees for private equity firms. Add to the less flexible balance sheets of LBOs subprime implosion in corporate America similar to the one going on in housing.
Debt taken on by LBO companies are packaged in another three letter acronym entities, they are called collateralized loan Obligations (CLO) rather than the more infamous housing relation Collateralized Debt Obligations (CDO). SIVs and banks were left holding the bag with the housing mess, will they be holding another surprize for us with corporate subprime?