PE Firms Sitting on $400 Billion of Deal Debt

NEW YORK (Reuters) – The biggest private equity groups are sitting on $400 billion of debt that needs to be repaid over the next five years, the Financial Times reported, citing data from S&P LCD.

The private equity firms face more than $21 billion of debt maturities in the next two years, another $50 billion in 2012, $115 billion in 2013 and $192 billion in 2014, the paper said.

Private equity firms typically buy companies in leveraged buyout deals, which loads those firms with debt. During the easy credit period of 2005-7, private equity firms took scores of companies private in deals worth billions.

The subsequent credit crunch and lack of availability of finance has meant that refinancing debt is a looming problem. (Editing by Lincoln Feast)