Blackstone and GIC execute rare Asian dividend recap

Private equity and sovereign wealth groups take advantage of strong bond markets to raise funds to pay themselves a special dividend in Indian outsourcing company.

Blackstone and Government of Singapore Investment Corp GIC broke new ground for Asia's private equity industry on Tuesday after using the bond markets to raise funds for a dividend recapitalisation in Indian outsourcing company MphasiS. 

Dividend recaps are a fairly widely used tool in the US and Europe, enabling private equity sponsors to take money out of their acquisitions without diluting their stakes. As such, they have been fairly controversial since loading up companies with debt to pay investors a special dividend weakens their credit metrics.

They have rarely been used in Asia and always through the syndicated loan market. Korea's MBK Partners previously...

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