The Private Equity Default Party in Q1 09

Some harrowing if unsurprising data from S&P and PE Week Wire:

  • Year-to-date, 60 of the 2,238 companies tracked by S&P with speculative grade debt are in default
  • 22 of those 60 are are private equity  backed, implying a 37% default rate so far
  • Assuming defaults rise to 5% from the current 2.68%, that implies another 111 defaults, a figure to which you can attach the 37% figure from above
  • Buyouts are now drawing down heavily on revolving lines of credit, which suggests we could see some major busts come Q1 09

More here.