Buyout firms eye portfolio debt buy-backs

The success of TDC, the Danish telecoms company backed by a buyout consortium, in deleveraging by buying its own debt at a discount, has tempted other firms to follow suit.

A number of leading private equity firms are looking at ways to buy back company debt to deleverage their portfolio companies at a discount using weak debt market conditions, according to two partners at Kirkland & Ellis.

Buyout firms are looking to benefit from terms in documents allowing their portfolio companies to buy debt from lenders.

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