Citigroup, Goldman cut LBO backlog

Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase are offering deep discounts on high-yield bonds and loans, Bloomberg reported.
The Wall Street lenders are trying to get rid of debts from leveraged buyouts, which, in the aftermath of the subprime mortgage disaster, are now in low demand.
Those banks have a cumulative backlog of $231 billion in bonds and loans to distribute.
They have been busy helping to fund deals, but not busy enough.
For example, Deutsche Bank, Citigroup and Wachovia are just three of the banks chipping in $22 billion to help Bain Capital and Thomas H. Lee partners take Clear Channel Communications Inc. private, according to filings with the Securities and Exchange Commission.
However, leveraged buyouts have fallen to $101.9 billion during the second half of the year, compared to $336.4 billion in the first half, Bloomberg reported.
Lenders’ need to eliminate related debts has caused them to hawk bonds at a 10% discount and loans at 5% below face value, Bloomberg said.