Goldman Sachs Group Inc. is struggling to sell $2 billion in bonds backing the buyout of software firm Solera Holdings Inc., another sign of cracks in the market for the low-rated debt that has been a key driver of the takeover boom, the Wall Street Journal reported today. Solera’s sale to Vista Equity Partners was one of the biggest leveraged buyouts of last year, at $6.5 billion including debt, and has been widely viewed as a test of the credit market. The bond sale comes at a time when U.S. junk-bond issuance has dropped more than 70 percent from a year ago and borrowing costs have increased, as risk-averse investors back away from riskier securities or demand sweeter terms. Solera’s bonds carry a Caa1 rating from Moody’s Investors Service, which is where some of the worst market carnage has taken place in recent months as investors dial back their risk taking. U.S. junk bonds last year posted their first annual decline since 2008, reflecting a broad retrenchment in the lowest reaches of the market.
