Erin Griffith

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from ratings agencies Moody’s Investors Service and Standard & Poor’s. This week the ratings agencies only rated two companies: Aspect Software, backed by American Capital and Golden Gate Capital, and SS&C Technologies, backed by Carlyle Group. Interesting sidenote: Yesterday a banker told me that, when considering what how much debt to put on a company in new LBOs, debt providers are telling the potential buyers of debt to due their own diligence on the company instead of buying based on the rating alone. Obviously since the financial collapse, the ratings agencies haven’t been seen as very reliable, but I’m wondering if they’re very relevant to buyout pros today or not. Do any of you not really care about ratings on your portfolio companies? Company: Aspect Software Inc. Sponsor: American Capital and Golden Gate Capital Action: Moody’s upgraded the company’s corporate family rating to B2 from B3 pending closing of their proposed new debt facilities. Highlight: “Maturities have also been pushed out to May 2014 from September 2010 for the revolver and to May 2016 from July 2011 for the new first lien term loan.”

Good News! Hiring for private equity is on the rise! (FINS) Did You Hear? Obama came to Wall Street today. Lloyd Blankfein was there. Wall Street's response to his call for financial reform was some variation of Step Off. Oh, and for some reason the NYPD took this as an excuse to steal a ton of bicycles because they might have pipe bombs in them? (But the bike racks, barracades, stop signs, cars, basically everything else, is all fine.) Ridiculous. Michael Lewis: The bond market will never be the same after Goldman. (BusinessWeek) Not Helping Guys: The recession is over so conspicuous consumption is apparently ok again? Financial news thinks so with two pieces called "How to Spend Your Bonus." This one's on Diamonds. This one's on Vintage cars.

The Blackstone Group’s first quarter earnings beat analyst’s estimates financially and beat the public’s expectations. In short, the media call this morning was sickeningly positive. Life appears to be good for Blackstone Group. The company earned $360 million in Q1, up over its $82 million loss in Q1 last year. In the media call, Blackstone President Tony James said fundraising is heating up, Blackstone is preparing between 8 and 10 companies for IPO (but “don’t take that as gospel”), and, frankly, Blackstone itself isn’t worried about too much these days. Even in terms of bank investing, Blackstone may have abandoned hope on finding a big bank buyout with FDIC rules remaining strict, but the firm has regrouped with a new, smaller roll-up strategy instead. Get highlights after the jump...

Sankaty Advisors has closed its debt fund dedicated to the middle market with more than $900 million in commitments, the firm confirmed. The Boston-based credit affiliate of Bain Capital aims to use the capital to fill a whole in middle market deal financing. Sankaty launched the Sankaty Middle Market Opportunities Fund LP in August of […]

Excuses, Excuses: Here's why Maria Bartiromo, someone with access to the top banking execs in the world, doesn't ask the hard questions (keeping that access being reason number one...). (Business Insider) List: Three questions for Entreprenuers (HBR) Acquisition Opportunity? I know you guys are sick of old media and all, but Disney may be ready to unload ABC once and for all. Anyone tempted? (MarketWatch) Follow-Ups: The FT echoes what we reported yesterday: Secondary buyouts are booming in the UK, too. (FT)

If the HCA dividend-to-IPO showed us anything, it’s that investors don’t mind PE backers taking money off the table before a (probable) public offering. The consensus at Buyouts West last week was that the HCA dividend recap was not an isolated case, with others to follow in the coming months. But that just seems greedy, you say. Why do PE pros need a payday before an IPO, which essentially counts as a payday? Why don’t investors rail against this practice? The answer is simple: If it doesn’t substantially increase the company’s debt, investors don’t care. Furthermore, most PE backers take very few shares off the table in an IPO; the returns come from follow-on offerings or private sales. They may remain in a company for three more years before fully exiting their position. Therefore, investors in an IPO don’t view a sudden dividend recap as a risk. PE backers would be working against their own interest if they took a large, risky dividend recap on a soon-to-be public company.

A word of unsolicited advice, if I may. I know you're hoping to make a comeback with the success of your investment in Liverpool Soccer Club, and all the best. But it seems to me that, at this point in the game, you may want to convey the good news to your investors and leave the general public, and the Wall Street Journal, out of it. We get that you emerged from the telecom bubble a little more battered than others. We get that your foray into sports team ownership has been a bit hairy. So we understand that when you've done something good, you want to tell the world! You quadrupled your money! Or at least you might, if you get the price you want! Great job! However, when you do it in a way that pisses off a bunch of people, to the point where they're holding demonstrations in front of the stadium whenever you show up, even creating fictional Twitter accounts to diss you, you may wanna keep that to yourself. After all, you're still America's 371st richest citizen, and they are not.

Go Tumblr Go: The simplified blogging platform raised $5 million. Here is its plan for the future. (All Things D) Where Goldman Really Went Wrong: It doesn't matter if Goldman broke the law-was what they did wrong? (Fortune) Annnd the Beating: Deal Journal liveblogged Goldman Sachs's Q1 conference call. (Deal Journal) Rachel Sklar: Where are the Women in Tech (Again)? (Mediaite) How Transparent are PE Fund Managers? As a journalist I'd say not at all, and even, gleefully so, at times. (Not Too Proud)

Sponsor-to-sponsor deals aren't always popular, but they're certainly in vogue right now. The first quarter of this year saw a surge in sponsor-to-sponsor, or secondary buyouts, in which one private equity firm sells a portfolio company to another private equity firm (or group of firms). Data provider Preqin reports 24 such transactions last quarter worth $7 billion in deal value, compared to just $5.1 billion for 43 deals in all of 2009. And this doesn't even include a rash of transactions announced today (see below). What's driving the activity? First, private equity pros are desperate to do deals. Despite everyone's peacocking that '08 and '09 were "the best investing opportunities of our lives," most buyout pros were all talk. The deal volume speaks for itself-PE pros were largely on the sidelines during

Keystone National, a private equity fund-of-funds manager and advisory shop, is halfway to its fundraising goal on Keystone Private Equity Opportunities II LP, according to a regulatory filing. The firm has raised $73.5 million toward its $150 million goal from 89 investors. Keystone launched the fund in 2008. The firm primarily invests capital from wealthy individuals into private equity funds. Keystone lists placement agent compensation from professionals at Cambridge Investment Research, SMH Capital, Sunbelt Securities, National Planning Corporation, Lincoln Financial Advisors Corporation and Geneos Wealth Management.