The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: redfrecknj who wrote (81744)	5/14/2007 7:16:11 PM
From: Perspective	Read Replies (1) of 110194

<they borrow money to buy back and destroy their own higher yielding shares> What yield is the corporate world paying to "buy back and destroy their own higher yielding shares" these days? I know spreads are low, but Aaa corporates still cost 5.5% economagic.com economagic.com so a company would have to have a PE below 20 for that logic to make sense, right? What are the private equity funds paying for debt to do the LBOs? I struggle to believe the earnings yield is above the price of debt for these transactions, especially given that these are NOT financed with Aaa-rated debt. BC

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