What are “hung loans”? How do they relate to investment banks and buy-outs/take-overs?

Question by Steve: What are “hung loans”? How do they relate to investment banks and buy-outs/take-overs?
how do they relate to investment banks/PE firms in a take-over,

Also, when a ibank/PE firm wants to takeover or buyout another company, does it first do so from debt or a bank loan or from sale of it’s own bonds?

thanks, any info would be greatly appreciated

Best answer:

Answer by Jade C
“Hung loans” is debt that is stuck on the books of the investment banks because no one will buy the loans from them. A leveraged buyout is typically funded by the sale of bonds.

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Tags: Banks, Buyouts, buyouts/takeovers, Hung Loans, Investment Banks