Suppose that a private company wants to raise money, but they want to do so only be issuing debt (i.e. bonds). Why isn't this method of raising money more common? I realize how an LBO works by issuing massive amounts of debt to buy out a company. But suppose that there is a new company. This company wants to not dilute the existing shareholder's value, and therefore, it only wants to issue debt. Is this possible or common? If so, why/why not?
- posted
16 years ago