The Fed recently won an interesting concession from the Blackstone Group on some debt issued by the Hilton group, which Blackstone owns. The Fed, which inherited the Hilton debt after the near-collapse of Bear Stearns in 2008, "won an extraordinary pledge from Blackstone: compensation equal to the IPO fees if the buy-out fund ends up picking any of those banks for the listing," according to the Financial Times.
Other banks, like Bank of America and Goldman Sachs, were thought by the author to have accepted huge haircuts on the debt in exchange for a tacit quid pro quo: that Blackstone would make it up to them later by making them underwriters on an eventual Hilton IPO. Participants denied this version of events.
"Even if one accepts that banks, like retailers and travel companies, can use loss-leaders--too bad for the Fed--the Hilton affair suggests that the race to advise on IPOs may not be fair," reports the FT.
Deals of this sort are likely common on Wall Street, certainly legal. Most people do not assume the process is pure when it comes to choosing underwriters.
For more:
- here's the article
Related Articles:
Private equity-backed IPOs still faring poorly
Goldman Sachs struggles in corporate debt underwriting
The outlook for private equity firms
Blackstone explores Hilton options
LINEAR TECHNOLOGY . LEXMARK INTERNATIONAL LEVEL 3 COMMUNICATIONS LAWSON SOFTWARE
No comments:
Post a Comment