Flagging Debt Markets Table IPO's: Chris Mayer / July 30, 2007

The drunken revelry of the buyout boom looks like its finally hit a snag. Credit markets are in turmoil, which is another way of saying that the bar is closing.

Without easy and free access to cheap booze - er, I mean credit - the liklihood of pulling off those headline-catching buyouts is about zero.

Yesterday, we got another bit of evidence that the private equity boom is just about over. According to the WSJ: "As flagging debt markets bring the private-equity boom to a halt, the likelihood that Kohlberg Kravis Roberts & Co. will have to postpone its initial public offering is increasing."

It's almost comical. Investors seemed to crave buyout firms. They poured billions in buyout group Blackstone's recent IPO. Now, suddenly, it seems doubtful that KKR will be able to find enough investors to pull off an IPO.

All of this ties to the stock market as private equity buyers have helped prop up valuations with their aggressive purchases. Without them, the market losers a big buyer. No one knows for sure why the market takes a dive, but troubles in the credit market and the drying up of private equity buyers, seems like good reasons for a fall. — Chris Mayer

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