- Under far closer regulatory scrutiny for the past several years, the big Wall Street banks had ceded to alternative lenders much market share in financing large going-private deals.
- But yesterday's $1.6B LBO of Barracuda Networks by Thoma Bravo looks like a deal from more than 10 years ago, with financing being provided by Goldman Sachs (NYSE:GS), Credit Suisse (NYSE:CS), and UBS (NYSE:UBS).
- Doing some back of the envelope work, Gillian Tan figures the Barracuda borrowing equates to about 9x EBITDA. That's way higher than the 6x or lower regulators have preferred for banks, but there's a new sheriff in town. The acting comptroller of the currency earlier this month declared that 6x guidance "shouldn't be binding."
- The development is of particular note for Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM). In 2010, the two combined for nearly a 35% share of the U.S. leveraged loan market. That's shrunk to roughly 20% this year.
- Previously: Barracuda Networks +15.7% on $1.6B go-private deal (Nov. 27)
- Now read: Citigroup (NYSE:C) Vs. Bank Of America - Has Citi Been Punished Enough?
Original article