US Foodservice: The envelope pushes back

The failure of a $1.6bn bond offering for KKR’s buyout of US Foodservice is a blow to LBO firms. But it isn’t necessarily a portent of doom for the debt markets. It reflects a healthy rebalancing of power between issuers and lenders. If more big LBOs go the way of US Foodservice, however, lenders might be spooked into avoiding these deals altogether - causing rates to spike and putting an end to the buyout boom. Lenders’ assertiveness is a recent development. Hedge funds and collateralised debt...