Date updated:03-10-2007
From Barron's 3-12-07:
"Private equity funds grab headlines with their enormous leveraged buyouts, but they'd barely merit the back page without the corporate bond market, which buys much of the debt that enables these deals. No one knows this corner of the credit markets better than Carol Levenson, an investment-grade bond analyst who helped found Gimme Credit in 1994. The research shop now boasts nine analysts who post pithy, yet insightful, comments on corporate bonds throughout the day...Here's Levenson's take on today's credit environment, how to approach LBO risks and where one might consider hiding."
Levenson also added that she has "some names where there are LBO rumors or event-risk rumors, that we have discounted to the extent where we feel that the bonds are attractive."
Here are some companies whose bonds she likes despite rumors of credit events like LBOs.

-
MOT
Motorola Inc - $8.89
- -4.51%
- $9.26
Yield: 6.25% due 2025 "Motorola [MOT] is one of them. It's a Carl Icahn scare [He's been buying shares and wants a seat on Motorola's board to pressure the company to give some of its $11 billion in cash to shareholders], and the company does have lots of cash....But as our analyst has explained, Motorola has already done so much to improve the company, what is there left to do? They are already doing stock buybacks, and he feels they can do even more in the way of buybacks without materially harming the credit."

-
FDC
Fdc - $0.00
- N/A
- $N/A
Yield: 5.50% due 2015

-
AT
At - $0.00
- N/A
- $N/A
Yield: 7.875% due 2032

-
SLE
Sara Lee Cp - $11.69
- -1.10%
- $11.65
Yield: 6.60% due 2032

-
DE
Deere Co - $47.16
- -1.97%
- $47.79
Yield: 5.10% due 2013 "There were LBO rumors about Deere a while back. That was a great chance to buy a very good credit that doesn't usually get cheap."

-
SWY
Safeway Stores In - $22.84
- +0.71%
- $22.48
"Safeway Stores [SWY] is another name. Periodically, there are leveraged-buyout rumors in the supermarket space, where deals have gotten done."
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