It was at the height of the 1980s buyout boom when Mitt Romney went in search of $300 million to finance one of the most lucrative deals he would ever manage. The man who would help provide the money was none other than the famed junk-bond king Michael Milken.
What transpired would become not just one of the most profitable leveraged buyouts of the era, but also one of the most revealing stories of Romney’s Bain Capital career. It showed how he pivoted from being a relatively cautious investor to risking his reputation for a big payoff. It is one that Romney has rarely, if ever, mentioned in his two bids for the presidency, perhaps because the Houston-based department store chain that Bain assembled later went into bankruptcy.
Comments
We can expect Michael and Beth to peel back the onion of every deal Bain has ever done, trying to paint Mitt Romney as an evil villain. This is shameful. I know the Globe will not support he local Republican, but it should at least pretend to be objective. Pieces like this serve no newsworthy purpose, it is simply a means to enforce the false narrative of Mitt Romney, the evil corporate raider.
Nobody thinks Mitt is evil. Just that he will do or say anything to make money or get elected. And that he gyrates from one side of an issue to another. And he's not very bright. Or likeable. But not evil.
Junk bond is a pejorative. These bonds carry higher risk of default but also offer the investor a higher nominal interest rate. If the investor is willing to accept the higher risk, what is wrong with that? By the way, Michael Milken was a choir boy compared to John Corzine, who has not yet been imprisoned for his misdeeds.
So wait, PE = ROI for LPs & GPs? You don't say!
Romney was using the rules of the road as they then existed. The focus was very narrow without any wide analysis if things went awry and had a real human cost. However this is not a free market where transparency is suppose to exist, but a freebie market where what someone doesn't know is an advantage for your side. No win-win deals but rather a zero sum game. As President he is very unlikely to reverse his thinking on this.
The Globe appears to have dug long and deep to find not only an unflattering picture of Michael Milken, but also one which clearly shows this one time "Master of the Universe's" one time penchant for bad toupees. At the same time, the Globe failed to acknowledge that when Milken and Drexel Burnham eventually crashed and burned that numerous others from both the Democratic Party and the GOP so suffered "reputational" damage, if not worse.
The name Michael Milken is such a bad brand to be affiliated with, I can only imagine the champagne pouring when the Globe realized it could link Mitt Romney to such a tarnished brand. It is sad because, there is so much more to the story behind Michael Milken and junk bonds. In truth, high yield debt to this is a perfectly legitimate method of capitalizing a company. But guilt by association is all the Globe was reaching for here, luckily for Mitt, only those who bought into "hope and change" will buy into this latest weak and smarmy hit.
Nice choice of picture. Makes him look like a mad hatter. Once again, The MSM Super pac for Obama strikes
This is a great article, painting what seems to be an accurate, fair portrayal of Romney. It's disappointing that romneyeconomics.com has distorted the history of Stage Stores. Since it sounds like Romney was not involved in the management of the stores, I'd like to know more details of the financing deal he crafted, to help get a better sense of his background.