Leveraged Buyout May 2026

: Often called "junk bonds," these are unsecured and carry higher interest rates due to increased risk.

The ultimate goal of an LBO is to realize high returns—often targeting an of 20% to 30%. Understanding the Leveraged Buyout Model - HBS Online leveraged buyout

: The assets of the acquired company (and sometimes the acquirer) serve as collateral for the loans. : Often called "junk bonds," these are unsecured

: A hybrid of debt and equity that fills the gap between senior debt and equity. : A hybrid of debt and equity that

LBOs are defined by their unique capital structure and the use of the target company's own assets to facilitate the purchase.

: The cash investment from the PE firm, usually 10%–40% of the deal. The LBO Lifecycle

The "capital stack" in an LBO is often layered by risk and repayment priority: