Blackstone Weighs Dropping $3 Billion Debt Plan as Equity Tranche Lacks Buyers
Blackstone is considering abandoning a roughly $3 billion debt financing plan intended to return capital to investors in one of its older private equity secondary funds. The firm has spent months structuring a collateralized fund obligation backed by about 700 underlying investments, but has struggled to place the riskiest equity tranche. People familiar with the matter said the plan may be shelved, though no final decision has been made.
Blackstone is considering abandoning a roughly $3 billion debt financing plan that was intended to return some capital to investors in its funds. According to people familiar with the matter, who asked not to be identified because the information is not public, Blackstone has spent months arranging a collateralized fund obligation (CFO) for one of its earlier private equity secondary market funds, which holds about 700 underlying investments.
The firm has encountered difficulties in placing the equity tranche of the transaction, which is typically the riskiest portion of such deals.