A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or "bootstrap" transaction) occurs when a financial sponsor acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage (borrowing). The assets of the acquired company are used as collateral for the borrowed capital, sometimes with assets of the acquiring company. The bonds or other paper issued for leveraged buyouts are commonly considered not to be investment grade because of the significant risks involved.[1]

Readers: This is the second article pasted here on leveraged buy-outs. My next posting will be a re-posting of material from Wikipedia specifically on Leveraged Buy-Outs. The article below should be more understandable with a basic knowledge of what a Leveraged Buy-Out (LBO) is and how they operate. A key point is that within a LBO the workers are fully treated as an expense only in the process to create double digit returns on the leveraged capital.

Readers: this is the first article that we have published here on leveraged buy-outs. It is yet another dimension of the financialization of economics which was a product of Wall Street greed and the availability ZIRP money from Japan and now from the US and UK. As an example the money pushed through Congress supposed intended the fund green technology projects primarily created employment in China, not in the US.