Source: GF Data Resources
Leverage Remains Conservative
With small fluctuations, total debt involved in these private equity transactions averaged about 2.5x adjusted EBITDA throughout 2009, and senior debt about 1.7x. In contrast, the total debt and senior debt leverage figures were 3.5x and 2.5x, respectively, leading up to the credit crisis in Q4 2008.
Anectdotally, SDR has witnessed an apparent loosening in leverage on $10-million-plus EBITDA transactions and very little, to no, loosening in leverage on $10-million-or-less EBITDA transactions. Statistically, the Q4 data shows early signs supporting both of these observations.