Erin Griffith

As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor’s Investors Ratings Services and Moody’s Investor Service. This week we’ve got two bankruptcies and even more distressed debt exchanges. Company: NCI Building Systems Sponsor: Clayton, Dubilier & Rice Action: S&P raised its corporate credit rating on Houston-based metal building components manufacturer NCI Building Systems Inc. to 'B+' from 'SD' (selective default) and affirmed its 'B+' issue-level rating on the company's $150 million senior secured term loan. Highlight: "The upgrade follows the conclusion of our review of the company's new capital structure upon completion of its recapitalization," said Standard & Poor's credit analyst Thomas Nadramia.

Justify Yourselves Once Again: Ah, yes, the age-old question. Does private equity create value? Here's one brand new post on the topic via the Harvard Law Blog, and here's a teaser for a brand new book on the topic (which argues decidedly against private equity) called the Buyout of America by Josh Kosman. Icahn't: Carl Icahn is so over blogging. (Hedge Hub) To LPs: You have an advocate. And he says you deserve more information. (James Bachman) How NOT To Get A Job on Wall Street: A tale of Jeffrey Chiang, a guy who saw several hiring processes going very, very sideways. Probably around the time he manufactured a competing offer email and spelled the firm's name (Bank of America) wrong. Yikes. The Pay Czar May Like This Data: More compensation does not make people more motivated and better at their jobs after a certain level, according to a new study. (Adam Pasick)

Unlike venture firms, where Twittering, blogging, and social networking pretty much come with the territory, private equity firms have been consistent with the "private" part of their names, shying away from the exhibitionism of social networking. Until today, when an email from buyout firm Huntsman Gay announced that the firm has crossed over to the dark side. I think that's great news, but don't get excited, this move was not done enthusiastically--check out the wording on this announcement: "We're also working with a number of folks in the broader investment community on Twitter to determine whether it's a useful real-time communications medium." I read that to mean, "We're doing this even though we think it's dumb."

Secondary sales of private equity stakes are largely a mega-fund activity, according to Todd Glasson of InvestorFlow, which provides a qualified matching service (QMS) platform and other investor relationship management services. He predicts a continued increase in secondary sales next year from the largest buyout firms but said QMS activity has not trickled down into the middle market. A number of large buyout firms have implemented captive QMS operations to support general partners in the sale processes and allow the firm to increase safe harbor limitations on the percentage of the fund that can change hands in a given year from 2% without a QMS to 10% with one.

Gary Bland, State Investment Officer of New Mexico State Investment Council, has resigned from his role, a move likely related to his fund’s dealing with Aldus Equity's Saul Meyer, the investment pro who pled guilty to fraud in securities transactions in New York and New Mexico. In court, Meyer admitted to wrongdoing as an adviser to New Mexico's pension fund: Contrary to my fiduciary duty, I ensured that Aldus recommended certain proposed investments that were pushed on me by politically connected individuals in New Mexico. I did this knowing that these politically connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico. In addition to Aldus Equity, New Mexico has ties to Searle & Co., the advisory firm of indicted placement agent Henry Morris. Quadrangle Group and Carlyle Group used Searle to get investments from New Mexico.

Things That Make You Go Hmm: The Journal is reporting that a firm called Iogi Energy has offered to buy $1 billion of CIT debt. Setting aside the headline confusion over the firm's misspelled name, there's something suspect about this offer. Reuters said the offer raises questions, as its from an obscure hedge fund which would not reveal its source of financing. If it is legit, it won't be the first unsolicited offer CIT has received for its assets. Earlier this month Wilbur Ross told Reuters (and peHUB) he has approached the troubled lender with interest in certain assets if it were to sell them. Diamond in the Nasty Rough? 3 Reasons to buy American Capital stock, as of last week. (Motley Fool) PIPE Me Up: Deal activity in the PIPE market returned to historical levels in the third quarter, albeit at lower levels of capital investment. Private Raise via Private Equity Beat Party's Over: Analysts expect brewer Anheuser-Busch Inbev to bring its asset disposal programme to an end, which has generated three of the 10 largest private equity deals this year. (Financial News, Sub. required)

Here are some potential target ideas, rumored or official, to jumpstart your deal pipeline. Our sources are various news reports and the Buyouts “Seeking Buyers” list. For prior lists, see below. Allied Capital is selling Callidus Capital Management, its high yield, high risk loan unit, Bloomberg reported. The unit has $3.8 billion under management. AutoImmune Inc., a Pasadena-based biopharmaceutical company involved in the development of treatments for inflammatory disease, has retained Junewicz & Co. as its financial advisor for the evaluation of strategic alternatives. IMS Health has retained Deutsche Bank Securities as its financial advisor as its explores strategic alternatives. Reuters reported that IMS had received an initial round of bids last week and that it might make a decision as early as November on whether to sell the company. The report stated that Private equity firm TPG TPG.UL had submitted an offer and that Silver Lake and BC Partners had submitted a joint bid.

A new Grant Thornton white paper offers an analysis of data points from Dealogic and Thomson Reuters which detail the changes taking place in the liquidity markets and on the fundraising front. The discussion not only centers on where fundraising and exit opportunities are today, but where they are headed in the future. Download it below.

Who's Powerful in New York? Not buyout pros! At least according to New York Mag's "power dozen" list, which includes private equity reformer Andrew Cuomo, and Mike Fishman, a chapter president of another private equity enemy, the SEIU. (NY Mag) What, No Thanks? The Wall Street giants that received a financial lifeline from Washington may have no compunction about paying big bonuses to their dealmakers and traders. (Dealbook) Lehman's Collapse Unveiled: Recently unsealed court documents show some interesting email exchanges in the hours before the Lehman/Barclays deal. The Wall Street Journal's Bankruptcy Beat has the best line from an email from Alex Kirk, Lehman's key negotiator: "Rich Ricci [of Barclays] just told me he won't blow up this trade by being a pig."

Investcorp is on a roll. Since buying heavy-duty parts distributer FleetPride in 2006, the buyout firm has led the company through thirteen add-on acquisitions. Thirteen! That’s as many companies as most firms have in their portfolio. Including today’s deal for Angelo Fleet & Industrial Supply, FleetPride has announced five deals in just this year, which […]