After a quarter off private equity underwriters (PEU) brought back their signature debt for dividend move, also known as a dividend recap or liquidity recap..
Providence Equity Partners-backed Bite has earmarked roughly 200 million euros ($232 million) from an issue of senior debt to pay shareholders. Around $560 million of proceeds from the loan being sold by Epicor will be used for a payout to KKR & Co.Sponsors cash mining affiliates should not be a surprise. The Carlyle Group siphoned off millions from Philadelphia Energy Solutions before it declared bankruptcy (the first time). Carlyle profited from ManorCare, another affiliate it drove to bankruptcy. That dividend came in the wake of Carlyle's spinning off ManorCare's facilities to a healthcare REIT.
How long before Bite or Epicor have financial problems due to sponsor dividend bleeding? It remains to be seen.