U.S. Hotel M&A Answers Private Equity Capital Conundrum

Fitch Ratings | November 23, 2015

Fitch Ratings-New York-23 November 2015: Corporates, or strategic buyers, may participate in more merger and acquisition (M&A) transactions in the U.S. lodging industry if the capital conundrum for private equity (PE) firms persists, Fitch Ratings says. Lower investor demand for high yield bonds and loans caused by recent capital markets volatility, if continued, would increase the cost of debt capital for PE firms, making it more challenging for them to deploy their significant uncalled investment capital, or dry powder. Total PE dry powder was $1.34 trillion as of October 2015, up 12.9% from year-end 2014, according to Preqin. Unc...