Erin Griffith

PIK Off: Univision, backed by Saban Capital Group, Providence Equity Partners, TPG, THL Partners and Madison Dearborn, has joined the handfuls of other PE-backed companies that have flipped their PIK toggles. (Dealbook) Abnormal Returns: Excellently rounds up some of the blog coverage of the Brawl Street episode. Asks: "Will Cramer-Stewart change the way CNBC does business? (Big Picture, FT Alphaville, StreetInsider.com, Market Movers, Mixed Media, Marketwatch.com, BusinessWeek.com, HuffingtonPost.com, Capital Commerce, Tuned In)" Venture PIPES: Not news to you, but it is to the Journal. (WSJ) There Are Women in Private Equity? Deal Journal hits up the "Women in Private Equity" conference. Coverage includes: ‘I Love Downturns," and "The New Order Now Begins."

Jon Stewart's chastising of CNBC has no doubt caused other financial journalists to reflect on their coverage of the past few years. Here at peHUB, that means the private equity bubble. Business publications did their fair share of suggesting LBOs used too much leverage. But looking at the massive write-downs, the sharp rise in PE-backed bankruptcies, PE layoffs, the deeply discounted secondary market, and near-worthless portfolio company debt, it's not out of the question to suggest we became numb to the numbers, and were too easy on private equity. ‘But private equity has always been a media scapegoat,' you say! It's true, issues like

As usual, I have a week's worth of Moody's and S&P downgrades on PE-backed companies. This week was a down week, with a mere four downgrades compared with last week's , and one withdrawal - Fenway Partners' suitcase maker, Targus Group. S&P also withdrew the rating for Pegasus Capital's Merisant Worldwide, the sugar maker that went bankrupt last month. Our downgraded company's sponsors include ABRY partners, Banc of America Capital Investors, Generation Partners, and Welsh Carson.

In an attempt to distance itself from its fallen parent company, Lehman Brothers Private Equity Partners Limited changed its name to NB Partners Limited. Meanwhile, the remnants of that failed parent company will continue to hold shares in NB Partners for a lock-up period that expires July 18 2010. At that point, NB Partners will assist Lehman Brothers in selling its 14.5 million shares in secondary transactions. In a conference call this morning, the firm’s leaders spelled out the firm’s write-downs to date, and bemoaned the company’s share price, a 79.2% discount to NAV. I’ve posted some highlights below, along with slides from the investor presentation.

There's more than one way to get a piece of the cheaper-than-thou private equity secondary market these days. You can invest in a traditional fund, like the ones I outlined earlier this week. Or, you can buy some shares of a public fund-of-funds that targets PE secondaries. Conversus Capital is the largest such option. The firm underwent a $1.9 billion IPO in 2007, using the proceeds to invest in the secondary interests of 168 funds and has since added 49 for a current tally of 217 funds. The idea is that shares of Conversus give you immediate and permanent exposure to the secondary market, whereas an investment in a traditional fund is spread over five to ten years. Today Conversus' market cap has shrunk to $456.3 million and it's written down the net asset value of its portfolio by 50%. However, the firm hasn't seen its capital calls outweigh its distributions, thanks in part to its mere 5% allocation to mega-funds. I spoke with CEO Bob Long yesterday about market timing, mega-funds, his firm's stock's performance, and what happens if distributions freeze.

Tune In! Jim Cramer faces off with Jon Stewart on The Daily Show tonight at 11. Daily Intel suspect Cramer is wimping out. Try Getting Returns on This: "Lacking Leverage, Firms Embrace EBOs. (Wall Street Journal) Speaking of TV: This overly dramatic British account of the Madoff view is slightly more entertaining than the U.S. news sources' coverage. (Cityfile) Tog Dog Now Underdog: Myspace's plan to beat Facebook. (BusinessWeek)

The Buyouts, IFR and peHUB teams recently spoke with Babson Capital about the state of the debt market. Here’s a few highlights from the conversation with Jill Fields, head of the firm’s high yield group, and Russ Morrison, head of the firm’s bank loan group, discussing why covenant light isn’t the enemy and why private-equity backed companies will lead defaults. We’ve seen a few high yield issuances, is it a sign the markets are opening up? JF: It’s critical we see markets reopened. We’ve done a few deals where there was more interest than was available. We got 1/10 of (the amount of debt) we asked for. So there is a demand, and it gives confidence that there’s liquidity in the market, but everyone wants quality. It also shows

Back and Forth: Schwarzman says 45% of global wealth is destroyed. Felix Salmon says he is exaggerating, and why. And: He's complaining that "the glamour and the upside" that attracts young people to finance is being "compromised" by the "regulatory regime." Woe as he. (Dealzone) More CNBC Analysis: This time from Salon.com. Why Is Jim Cramer Shouting At Me? (Salon.com) And By The Way: Did you know the Ramones wrote a song about Maria Bartiromo? (The afore-linked Salon story includes this fabulous fact, among others. Somehow, the 90s were bad enough to take the band from songs like Teenage Lobotomy to the lyrics "What's happening on Wall Street, I want to know." Yuck. We all know bad things happen when you mix finance and rock.

Remember when PE firms backed out of signed deals in droves? They looked like jerks at the time, but in retrospect, they were probably smart to avoid the overpriced, highly leveraged deals they had aggressively pursued for the past three years. Taking into account the Dow’s record breaking drops last year, and assuming that a company’s stock price reflects its health, let’s look at the stock performance of 2008’s busted take-private targets and recoil at the premiums PE firms might have paid.

What's the alternative to a bankrupt portfolio company? A distressed credit exchange. Private equity pros are fully aware of this option, because it keeps their companies afloat without requiring new capital infusions or equity dilutions. Today Bloomberg reported there have been at least seven such transactions this year. Compare that with last year, which saw a total of 12 for the entire year, according to S&P. Lenders and bondholders are none too happy about the rising number of distressed credit exchanges. And why should they be? Lenders are offered a chance to exchange debt at a discount for cash or new securities. The transaction essentially benefits the PE backer because it keeps the company afloat while the bondholders take a loss.