The Carlyle Group indicated it might turn over affiliate Praesidiad to debt holders.
Moody's stated in its latest downgrade of the company:
Governance considerations are material to the rating action and related to Praesidiad's aggressive financial policy that reflects in historically very high financial leverage and weak liquidity. Considerations around Praesidiad's failure to address upcoming debt maturities and concurrently reduce leverage to more sustainable levels were among the drivers of today's rating action.
The Carlyle Group acquired Praesidiad in July 2017. Carlyle CEO Harvey Schwartz indicated it would refinance affiliates as part of its more aggressive credit strategy. I take it Praesidiad failed to make that cut. Ironically Praesidiad has its own finance division, Praesidiad Capital.
The question is how much Praesidiad debt Carlyle's numerous buckets hold. They've ended up with an equity stake before on bankrupted affiliates. It could well happen again.
