What is leveraged finance?

How can a private equity firm undertake one of those huge LBOs you hear about, while leaving the target company with the borrowed debt that has to be repaid?
Leveraged Finance, of course.
In this video, master explainer Paddy Hirsch details how these transactions work, what kind of debt is entailed, and who, at the end of the day, is left holding the bag (of money).
More videos from Paddy:
What is a leveraged loan? www.leveragedloan.com/primer/#...
What is a high yield bond?
www.highyieldbond.com/primer/#...
More on Paddy (nice specs btw, Paddy):
www.paddyhirsch.com/
Check out LCD's awesome, free Leveraged Loan and High Yield Bond Primers!
www.leveragedloan.com
www.highyieldbond.com

[@justinchang9977]

of all the lbo related videos I have watched, hands down this is the most simple and well articulated video by far

[@harishkadam5589]

Very well explained. Looking forward to see more such content.

[@Fj8282haha]

wish the channel continues … great presentation

[@victoriarudolph6453]

The glass is so clean!

[@ezrazephania8725]

thanks!!! very helpful

[@mohamadtahmasbi9048]

Perfect project

[@user-vb3fl6js2n]

Thank you for this. It is helpful

[@zubantungoe]

Very well explained that even my grandma can understand

[@nikhilkumar714]

Sir , Can you please name any course/ certification which gives full knowledge of Leveraged Finance operations?

[@doji-san]

So it's kinda like flipping a house but borrowing the money to buy the house to flip!! wow

[@llClassifiedll]

Lol i swear the corporate world try’s to make everything so complicated by giving it “sophisticated” names. When it finally made sense what PE was your comment is exactly how I looked at it.

[@jameskuckkan2326]

I'm just a little confused---they bought the company for 10 billion dollars, and they sold it for 15. I know that 7.5 billion has to go back to the lenders, but what about the net profit from the sale? Isn't it just 5 billion?

[@saltyjr3796]

Is this the same as trading from a short position?

[@niveaulimbo6101]

Salty jr no

[@JohnSmith-si8nz]

nope this is done by buying put options on a publicly-traded stock

[@alexanderyarizadeh1387]

that was good :)

[@philippberteit8479]

It‘s a 200% ROI

[@jenswachtel3424]

Isn't it even less. The interest likely eats up a chunk too

[@JohnSmith-si8nz]

he probably mixed up 3x cash on cash return and 200% ROI :D

[@netanelOnline]

and basically it's saying that the bank refuse to give this kind of lend so the population will give it with their pension and available money putted to investing

[@netanelOnline]

yeah but if they fail they also stealing money and assets right... so in reality the risk much is much lower.