An investor believes that a company will undergo a leveraged buyout (LBO) transaction, whereby it will issue
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An investor believes that a company will undergo a leveraged buyout (LBO) transaction, whereby it will issue large amounts of debt and use the proceeds to repurchase all of the publicly traded equity, leaving the company owned by management and a few insiders.
What equity-versus-credit trade might an investor execute in anticipation of such a corporate action?
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