Debt, buybacks let firms boost returns without LBOs

(Reuters) - In a growing practice known as leveraged recapitalization, companies increase returns by floating debt and using the proceeds to buy back stock or pay special dividends. These transactions are especially attractive now, when low interest rates make debt financing cheap.




Recaps are also a response by corporate chiefs who see the windfall generated by private-equity firms and want to perform their own financial engineering, stay in control and please shareholders.


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