The Toronto Star – And the beating goes on.
The global credit crisis that began last summer, triggered by a collapse in the U.S. market for subprime or "junk" residential mortgages, has since Feb. 15 forced hedge funds with assets of more than $5.4 billion (U.S.) to dump assets at firesale prices or simply liquidate altogether.
And bankers worldwide are suffering lenders’ remorse after financing highly leveraged private-equity buyouts of familiar names like Chrysler LLC, Hilton Hotels Corp., ailing U.S. media giant Tribune Co., Ma Bell parent BCE Inc. and scores of utility, financial, tech and other firms on lenient terms at the height of the takeover mania in 2005-07.
The banks now find that those takeover targets, bought at the top of the market and loaded with debt to finance their own acquisition, are struggling to stay current on their debt as the U.S. economy heads into recession.
