M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Friday, July 15, 2011

The end of the deal world?

Over at The Deal Journal, there is a slightly disturbing post that observes a late rush of deal making activity.  Could it be people are rushing to get deals through the door while borrowing costs are still low?  By that I mean, are smart deal makers looking at the nonsense going on in DC and figuring out that borrowing costs on August 3 are going to be through the roof, so best to push deals through and lock in financing right now? 

OK, this blog is decidedly apolitical.  If you want commentary on the state of the presidential contests or the political horse-race, you will quite rigthly go someplace.  Afterall, what do I know about any of that stuff?  (Uh...nothing.)  In any event, I do know this if the debt ceiling isn't raised (grand-bargain, mini- bargain, no bargain, whatever), then we will have pushed ourselves over a cliff of our own making.  Borrowing costs for the private sector - strategic buyers, private equity buyers, etc will all go through the roof - and deal making will come to an abrupt and complete end.   

In which case, there will be a whole lot less work for deal lawyers and all those new grads who will have just completed the bar exam will find their positions at firms deferred, or worse.  It will be a total nightmare.   

OK, off my soap-box, but don't say I didn't warn you.



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