Business / Finance / Leveraged Buyout (LBO): A transaction used to take a public corporation private that is financed through debt such as bank loans and bonds. Because of the large amount of debt relative to equity in the new corporation, the bonds are typically rated below investment-grade, properly referred to as high-yield bonds or junk bonds. Investors can participate in an L.B.O. through either the purchase of the debt (i.e., purchase of the bonds or participation in the bank loan) or the purchase of equity through an L.B.O. fund that specializes in such investments.
Business / Finance / Reverse Leveraged Buyout: Bringing back into publicly traded status a company that had been privatized by way of a leveraged buyout. MORE
Business / Finance / Management Buyout (MBO): Leveraged buyout whereby the acquiring group is led by the firm's management. MORE