The 2020 Mid-Year Economic Update_long

A Credit Crunch for M& A?

Tight credit markets are affecting sizable deals in progress and may dampen historically high valuations. But it's unclear whether the current state of credit will curb interest in distribution by financial buyers.
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Firms making sizable acquisitions are now having a tough time getting the loans they need to pay the agreed-upon purchase price.
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As a result, several billion-dollar-plus deals are being renegotiated, including the recent HD Supply deal. The trio of private equity firms buying the $12 billion unit is now paying $8.5 billion, instead of the original price, $10.3 billion.
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Seemingly overnight, banks have find it tougher to spread the risk of a loan largely due to a drop in interest from outside investors in buying some of that ...

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