He said Kohlberg Kravis Roberts is attempting to place high-yield bonds as part of the financing to take Dollar General private. Faber said it’s unclear how much more KKR will have to pay to complete the deal.
Dollar General was forced to restructure debt sales Wednesday as increasing risk made investors reluctant to jump into leveraged buyout financings.
“There’s no shortage of worries,” Faber said. “Whether or not there should be a lot of worry, that’s certainly a question for investors to consider.”
Faber said the number LBOs completed may decline in July and August, but he looks for the deal flow to return to normal this fall.
Several market analysts agreed that the buyout boom may slow for now.