Here They Go Again:Thompson-Reuters $17 billion Spin-Off Is 2007 Style LBO

Debt being 7.6 times the size of annual cash flow is high – and very risky for lenders..... Moody’s also laments Refinitiv’s “sub-par organic revenue growth that ranged from -1% to +1%,” while the major competitors “consistently produced higher organic revenue growth in the 5-10% range.” And the company’s “EBITDA margins are below peers, suggesting the absence of pricing power and limited ability to achieve meaningful share gains,” Moody’s says.

But none of these fundamentals matter to investors. These institutional investors – such as pension funds, insurance companies, loan funds, etc. – are eager to buy this debt to get some extra yield, no matter what the risks or consequences, because the party must go on.

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